Common Mistakes with DIY Estate Plans

The internet offers all the information and tools we need at our fingertips to create our own estate plan, right? Probably not. Consumer Reports® created wills using the forms provided by DIY websites and asked three law professors to review them. Although the professors found that the wills drafted using the DIY services were better than wills drafted by non-lawyers on their own, they were inadequate to fully meet the needs of most consumers. Although your DIY “estate plan” may initially cost only $49.95, it may end up being much more expensive than an estate plan designed by an experienced estate planning attorney.
Wills are only one part of a comprehensive estate plan that fully protects you and your family. Even if your DIY will meets all your state’s requirements and is legally valid, the will alone is unlikely to be sufficient to address all of your estate planning needs. Furthermore, DIY packages you can buy online may not include important documents that as a non-lawyer, you may be unaware you need to fully plan for the future. This is not a criticism. We simply don’t know what we don’t know. This could lead to unnecessary heartache for your family and loved ones you will one day leave behind.
DIY estate plans may not conform to the applicable law. The law that applies to estate planning is determined by each state—and there can be wide variations in the law from state to state.
A DIY estate plan could contain inaccurate, incomplete, or contradictory information. For example, if you create a will using an online questionnaire, there is the possibility that you may select the wrong option or leave out important information that could prevent your will from accomplishing your goals.
Your DIY estate plan may not account for changing life circumstances and different scenarios that could arise. If you create a will in which you leave everything to your two children, what happens if one of those children dies before you? What if your will states your daughter will receive the family home as her only inheritance, but it is sold shortly before you die? Will she inherit nothing? An experienced estate planning attorney will help you think through the potential changes and contingencies and design a plan that prevents unintended results and meets your estate planning goals.
DIYers frequently make mistakes in executing the plan. Under the law, there are certain requirements that must be met for wills and other estate planning documents to be legally valid. For example, state law differs regarding what is necessary for a will to be validly witnessed. For a valid power of attorney, some states require only the signature of the principal (the person who is granting the power of attorney) to be notarized, but some states require the signatures of both the principal and the agent (the person who will act on behalf of the principal) to be notarized. If you seek the help of an estate planning attorney, you can rest assured that all of the “i’s” are dotted and the “t’s” are crossed, and that your intentions will not be defeated because of mistakes made during the execution of your documents.
Assets may be left out of your estate plan. Many people do not realize that a trust is frequently a better estate planning tool than a will because it avoids expensive, time-consuming, and public court proceedings (i.e., the probate process) that would otherwise be necessary to transfer your money and property to your heirs after you pass.
Even if you have created a DIY trust, if you do not transfer title of your money and property into the name of the trust, it will be ineffective, and your loved ones will still have to endure the probate process. Further, it is likely you will acquire additional assetts over the years that must go through probate if title is not transferred to the trust.
A DIY estate plan can lead to a false sense of security. If your DIY will is not valid, your property and money will go to heirs specified by state law. An unfunded trust will be ineffective. Banks may not accept a generic power of attorney you found on the internet. Laws affecting your estate plan may change.
These are just some of the mistakes or unforeseen issues that could cost your family dearly. An experienced estate planning attorney is aware of any trends in the law that could dramatically affect your estate plan and has the expertise to help you create a comprehensive plan that accomplishes your goals and will avoid unnecessary attorneys’ fees, headaches, or conflict when you pass away.
Disclaimer: this article is not intended to be relied upon as legal advice nor the establishment of an Attorney-Client relationship.