I have mixed feelings about do-it-yourself estate planning. I think that in certain cases, when a person has very few assets and no minor (or irresponsible adult) children, and when they receive assistance in filling out the forms, it works fine. I also think that if the alternative to discounted legal assistance is no legal assistance, well, I understand. But these circumstances are limited. The frequency with which these plans go wrong, and the number of disclaimers pasted all over websites like Legalzoom, gives me serious pause.
My own disclaimer: there is some dispute about whether Legalzoom is even a true competitor of estate planning attorneys. Either way, when it comes to discussion of this subject, I’m an interested party.
Your estate plan is a big deal. Even if you don’t have to worry about estate taxes, the probate process, or nosy relatives (three very good reasons to have a professional estate plan), you are at the minimum appointing the people who are going to care for your loved ones, including a guardian for young children, your personal representative (“executor”), and possibly the trustee who will make sure your loved ones aren’t victimized.
I generally consider comparing lawyers to other professionals like physicians as silly and even a little distasteful. Doctors, after all, save lives, prevent early death, and manage your pain. Attorney obviously can do literally none of these things. But there is something we have in common: we take a complex situation that has the potential to really screw things up and we can make it better . . . if someone actually comes to us with the problem before it’s too late.
The point I’m getting at is: even when surgery looks very straight-forward, it isn’t, and you are probably going to want to have that looked at.
Your Will is Not a Refreshing Sports Drink
I think the biggest issue I have with do-it-yourself estate planning is that you are buying a bulk product, and it’s like any other bulk product you buy. Let’s use a silly example and say I am in the market for some Gatorade. If I go to Target (I love Target), I can choose the flavor I want, the size that I want, and how many of bottles I want and be on my way — but I’ll pay a bit more for the ability to make these choices. Alternatively, I can go buy it wholesale at Costco, and get a sizable discount (I love Costco too). But if I go the wholesale route, I better be prepared to be told what I want, and not the other way around. I’m going to get two dozen bottles of lemon-lime, all the same size. My preferences and any changes that might occur after the purchase (like getting sick of drinking lemon-lime Gatorade) are not taken into account . . . I can’t have a few lemon-lime, a few orange, and a few cherry. And I can’t limit my purchase to, say, six bottles. I’m told what they have, and it’s up to me to decide if that works for me.
Broadly, legal documents can be purchased the same way, but with stakes are a lot higher. If you want a ready-made will (or, shiver, a trust), you can get it super cheap because these documents are churned out en-masse, with form data. But unlike a trip to Costco, how are you supposed to know if a particular legal product works for you? You won’t get a choice — or have very little choice — as to how trust provisions will read. You won’t have a choice about which powers you want to give a trustee, and which powers are specific to your children’s care, etcetera. You are told what is available, just like Costco, and you decide if it will work for you. But unless you are a financial, tax, and estate professional, how do you know it will work for you? Legalzoom’s own disclaimer says that they will help you choose the right form, but if they are wrong, they are not responsible. This guy ended up disinheriting one of his kids . . . and he’s a lawyer. This is your family we’re talking about, not a refreshing sports drink.
You are not a one-size-fits-all family, and while a one-size-fits-all estate plan may work as a Band-Aid, you don’t get to pick and choose what you want, and eventually you are going to have to re-do this plan. Will having an estate tool custom-made for you cost more? Of course it will. But it’s an incredibly important part of your overall financial plan, and it’s worth the investment.
Put simply, paying for an attorney is not the same thing as paying for a document. Yes, the attorney will fill in the blanks of a document (a document that is customized to your specific state’s laws), but that is secondary. You are paying for the advice that goes with the forms. Your minor children likely need a trust drafted into your will, otherwise any money they get will go to the (expensive) court system until they are eighteen. You can’t make a minor a primary or contingent beneficiary of a retirement plan or insurance policy, but you can leave it to a trust, which has to be worded in a very specific way (as do the beneficiary designations of the retirement plan and life insurance policy). You need trustees, personal representatives, and guardians . . . and backups. You may need to word the document so that your growing family is taken into account so that you don’t have to redo this every time you introduce a child (or grandchild) into your family. You have to take into account changing laws and construct the documents to be flexible. You have to plan for incapacity — powers of attorney and a health care directive that speaks plainly about your wishes. The documents must be executed properly based on your individual state’s laws (each state has its own requirements), which usually includes a self-proving affidavit (so the probate court doesn’t have to track down your witnesses and bring them in to confirm that it was you who signed the documents). Icing on the cake: your assets all have to be titled properly for your estate plan to work at all. Et cetera, et cetera, et cetera.
And all of this assumes you have an estate that is small enough where you don’t have to do any real tax planning — federal estate and gift tax, state estate and gift tax, and income tax.
It is perfectly legal to perform surgery on yourself, but it is not generally recommended. Be careful, and don’t end up like these guys.
Philip J. Ruce creates wills and trusts for families who want to feel secure that their loved ones are cared-for. Philip is a trust and estate attorney based in Minneapolis, Minnesota. Philip is the author of Trustee University: The Guidebook to Best Practices for Family Trustees. available at Amazon.com in paperback or Kindle edition (free chapter available here!) He also works with trustees and beneficiaries who need help with their trusts. You can contact him here.
Keywords: trusts and estates, Minnesota wills, revocable trusts, estate attorney, probate, estate planning, will