Many people are turning to online estate planning platforms during the Covid-19 pandemic. This could be a good option for some people.
Some people with very simple estates can use DIY forms and systems effectively. If you go with an online DIY service, consider one that provides attorneys to help, it might be worth it to pay a little extra for that service.
Common problems with with DIY plans
While some DIY plans can work well, the problems with those plans fall into two categories: problems with the services and problems created by the user.
DIY Service Issues
Two common issues with DIY services are that the the forms themselves have errors and they are actually ineffective. This could be caused by poorly drafting or by using documents that are actually designed for another state. Keep in mind, that estate planning documents are state specific.
Websites can over simplify or inaccurately describe the purpose and use of the forms they offer. This means that you could complete the form differently than you would have if you had really understood the effect of the documents.
Issues caused by users
Some problems caused by users arise because the user wants to change the form or decides to write in special language to reach a certain goal that wasn’t intended by the form. These improper changes make the documents ineffective and confusing and can even void the documents. Here are some other common issues:
- lack of understanding or misunderstanding of income, property or estate tax consequences
- misunderstanding of common estate planning terminology
- improper execution of documents
- failing to update the plan to reflect changes in the law or tax code
- failing to create a comprehensive plan, such as not understanding how life insurance and beneficiary designations impact an estate
- failing to implement the estate plan, effectively eliminating the entire purpose of the plan, such as failing to fund a trust
How can you tell if you have a simple estate?
Estate planning is a complicated field and there are many nuances. DIY services can give you general information but for advice about your specific situation, you’ll need a professional. Some situations almost always warrant more care and handling by an licensed attorney. If you have any of the following situations, you should strongly considering hiring an attorney:
- you own real estate
- you have minor children
- you or your partner are in a second or subsequent relationship with children on either or both sides
- you have an adult child who is in a second or subsequent relationship with or without children
- your adult child is in a relationship with someone who has a child from a former relationship
- a child of yours or your partner passed away leaving children
- a family member has a physical or mental disability
- a family member has or has had drug, criminal or addiction issues
- a family member receives public benefits
- you or your partner have received or expect to receive an inheritance
- you own a business
There are, of course, many other issues that require more care. If you’re not sure whether you have a complex issue that needs more than an online plan can offer, a local estate planning attorney is the place to start.
Are These DIY Plans Bad for Estate Planning Attorneys?
There will always be those who think that they can do a better job than a professional. You might be thinking, of course she wants me to use an attorney, she is one! Guess what – you’re right but not for the reason you think.
At the beginning of this post, I described just some of the reasons why DIY plans can be a mess. Usually, by the time anyone notices a problem, the person who created the plan is in a coma, incoherent or dead. By that time the plan cannot be repaired. The only solution is to pay an attorney like me to fix it. This is always much more costly than hiring an attorney to create a proper plan in the first place.
So, here’s why I don’t want you to DIY your estate plan without talking to an attorney first: I do this type of work because I like helping families. No family deserves the stress, hassle and huge expense of dealing with a broken estate plan while, at the same time, trying to arrange for a memory care home, final wishes or even a funeral. Even worse, if parents die and leave young children, the children will be forced to use their inheritance, including the family home, to pay for attorneys and court costs.
Working with an attorney is expensive, I know that, but it can save you time and money in the long run. You wouldn’t reset a broken bone yourself. Similarly, you shouldn’t try to make you own estate plan without talking to a professional.
If you think you have a very simple estate, many states offer free and low cost forms available to the general public. If you’d like to find out if these forms are a good fit for you, contact me and we can go over the benefits and limitations of these low cost and no cost options.