Do you think you can create your own estate plan? In the right circumstances, the answer may be yes… But how do you determine what are the right circumstances? A recent US News and World Report article on do-it-yourself planning gives both sides of the argument.
There is a growing recognition that not enough people have estate planning documents and many wills, trusts, and powers of attorney are sold through the internet and by non-attorneys. These DIY plans have the benefit of being inexpensive, but often fail to provide for your loved ones in the manner you intended.
I am frequently contacted after a death by a family member whose loved one paid for the least expensive plan only to discover that the plan didn’t work for any number of different reasons. When contemplating an estate plan, lawyers owe a specific duty of competence to their clients (as well as other duties arising from the special attorney client relationship)—a DIY program or “fill in the blanks” document feels no such duty, and often neither do the people or companies who sell them.
When hiring an attorney, the documents themselves are the least expensive part of the relationship. The client is purchasing the lawyer’s knowledge and experience applied to the client’s unique circumstances. And although many clients believe they have a simple plan, in truth everybody has unique issues that require examination, and every client benefits from the personal relationship and the lawyer’s attention to detail.
I recently probated an estate wherein the family believed all the assets were titled either in joint tenancy with rights of survivorship or with POD designations that would avoid probate, but one single substantial bank account was improperly titled. As a result an expensive and time consuming probate procedure frustrated the family’s intentions of a quick and inexpensive administration procedure.
In two other recent cases I was able to avoid a probate despite the family having been advised that a probate was necessary to sell real property inherited from an ancestor. In one case a less expensive Affidavit for the Collection or Transfer of Real Property was appropriate despite the title company demands. In the other I was able to use a filing and recording proceeding so a foreign personal representative could act, even though the family had been told an Arizona probate proceeding was necessary.
Another increasingly common and painful occurrence that DIY plans aren’t likely to point out is family disputes over life insurance that occur because the decedent’s beneficiary designation is out of date due to (re)marriage, divorce, or birth or additional beneficiaries. Poorly thought out beneficiary designations for retirement accounts, or property left to minors or disabled descendants without adequate consideration for how the property is to be administered are altogether too common. Making the assumption that everything is in order and cutting corners on the review process is what dooms many estate plans.
Unfortunately, there is no bright line test for when a DIY plan can succeed. There is just no substitute for good legal advice. So please, be careful out there! I concentrate on creating estate plans that work using the least expensive alternatives, but without cutting corners. If you think I can help your family, or that you would benefit from a consultation, call me.