The do-it-yourself (DIY) estate planning industry has emerged and continues to grow. Many people have chosen to go this route, and many others are wondering why they cannot create their own estate plan themselves. And why not? The forms look similar, the strategies are developed by attorneys, and the cost is cheaper. Many couples do not think that their property is very complicated, and so their estate planning should be pretty straightforward. They then create their own estate plan online through a “DIY” website.
However, DIY estate planning has a lot of risks. Laypersons do not comprehend all the nuances of estate planning, and so it is easy to make a mistake that has large consequences but will not be found out until the person has passed away. These situations often lead to confusion, lawsuits, and damaged family relationships.
Considerations for DIY’ers
While DIY estate planning has benefited the market, individuals thinking about going down this path should at least think about the following:
• Legal Expertise
Yes, attorneys use pre-drafted forms to guide them in their conversations with their clients. However, forms are just the beginning. Estate planning attorneys have the experience and legal knowledge to modify those forms depending on a person’s unique life situation. They know the federal and state laws (and every state has different laws) that apply and how to conform to those laws. A DIY program may not (or assuredly does not) have the ability to do these things, greatly increasing the possibility that your estate plan will not do what you wanted.
• Counseling
My favorite title as an attorney is “counselor,” and that is for a reason. I believe that it is my job to counsel you to make the best decision for your family. Estate planning attorneys deal with families and estate plans all the time; we know what does and does not work. While the final decision is yours, I can identify potential problems and pitfalls, as well as describe successful strategies. I can help you make those important and sensitive decisions that are so vital in your estate plan, and help you know how to balance family needs and dynamics. Some of these situations include: who to raise your kids, how to take care of each of your children fairly and individually (not necessarily equally), how to deal with special needs considerations (such as an elderly parent or a child with Down Syndrome), and how to protect your property and children from creditors or bad spending habits. A DIY program or website may not be able to provide you with adequate counseling to walk you through these issues.
• Explain Your Intentions
If you do your estate planning yourself through a DIY website, there is no one left to explain what you really wanted to have happen after you are gone. However, your estate planning attorney will still be alive and able to explain your intentions if there is ever any doubt. As your attorney, I am unbiased and am in a trustworthy and objective position to explain your estate plan and its intentions. I can help avoid litigation because I can continue to express and clarify your desires after you have passed.
• Coordination of Assets
Wills and trusts do not control all your property. There are beneficiary designations, joint tenancy, retirement plans, bank accounts, and life insurance. None of these are governed by a will. I can help you understand these realities and work with you to make sure that all your property passes on in the way that you desire. A DIY website can help you create an estate plan, but it is limited with how it can help you coordinate your assets and make them a seamless part of your estate planning strategy.
• Tax Planning
Estate tax is only one tax consideration. There is also income tax and capital gains tax. There are ways to reduce and/or defer your tax liability if you are exposed to any of these taxes. These laws are also always changing, and an estate planning attorney can help your estate plan always conform to these laws.
• Complexity and Cost
At first, most people think that they only need a simple estate plan and that a DIY estate plan will be sufficient. However, a more detailed analysis of our individual circumstances make it clear that most of us actually need personalized planning. This analysis can often only occur while meeting with an estate planning attorney in person, not through a DIY program. In the long run, it is far better to spend money to work with an estate planning attorney, as we will almost certainly be able to save your estate money after you have passed away. This allows more of your property to pass to your loved ones.
How You Can Lower Costs
• When you learn beforehand about estate planning, how it works, and the documents that are a part of your strategy, the quicker you and your estate planning attorney can move on to designing the plan. Spending less time on education is beneficial to both you and the attorney. I would recommend you visit the Legal Topic Library in this website to begin your research.
• You can prepare a list of all your property and get a copy of those documents (such as the deed to your home, title to your car, bank account and brokerage account information, etc.). Think about who you want to give your property to and whether they have any special needs.
• Research potential estate planning attorneys. There is a wide range of ability, education, experience, and philosophy. Some attorneys are cheaper or more expensive than others. It is important for you to learn why their prices are different and if you are comfortable with those reasons.
• Come into your meetings with an idea of where you want your assets to go, but remember that the attorney is the professional and be open to considering any of their suggestions.