A quick Google search for ‘Wills’, ‘Trusts’, or ‘Estate Plan’ will provide dozens of results for low-cost, DIY or even free estate planning documents. You’ll see options for Powers of Attorney, Wills, or even Trusts.
Groups like LegalZoom, Rocket Lawyer or FreeWill.com will probably seem like a cheap and easy way to finally cross estate planning off your list. After all, you’ve been able to prepare and file your taxes online for years, is estate planning really that much different? And aren’t lawyers using the very same boiler plate forms you find on these DIY document websites?
Although equating cheap, online documents with strategic and more expensive planning may seem the logical thing to do, it is far from comparing apples to apples, but it is exactly the kind of thinking the big DIY document websites would like you to do. Relying on DIY or online estate planning documents can be one of the costliest mistakes you can make for your loved ones.
Keep in mind, just because you created “legal” estate planning documents online, that doesn’t mean they will actually work when you—or most importantly, the people you love—need them to. Without a thorough understanding of your family dynamics, the nature of your assets, and how the legal process works upon your death or incapacity, you are likely to make serious mistakes when creating a DIY or online estate plan.
Even worse, these mistakes won’t be discovered until it’s too late—and the loved ones you were trying to protect will be the very ones forced to clean up your mess or get stuck in a costly and traumatic probate court process that can drag out for months or even years.
In the end, relying on DIY or online estate planning documents can be worse than having no estate plan at all—and here’s why:
The primary purpose of estate planning is to keep your family out of court and out of conflict in the event of your death or incapacity. Yet, as cheap online document services become more and more popular, millions of people are learning—or will soon learn—that taking the DIY route can not only fail to achieve this purpose, but it can also make things even more complex and costly for the people you love.
A common misconception is that all about filling out the right legal documents. The true value of estate planning is not about the documents themselves—it’s the planning aspect that’s most important, not the documents. Documents are the byproducts of the plan and the outcome of counseling and decisions that require thought, consideration, and a true understanding of all the options and their potential consequences.
Without proper planning and consideration, the documents themselves—wills, trusts, health care directives, and powers of attorney—aren’t worth the paper they're printed on. Through proper planning, we mean having a trusted advisor who can help you anticipate all the potential problem areas and conflicts—as well as potential opportunities—that could impact your plan, and then help you adapt your plan accordingly and create documents to ensure the maximum benefit (and minimum heartache) for your loved ones.
When done right, the value of this kind of estate planning is truly priceless because it results in the right plan for your family at the right budget for you, and it leaves your loved ones with not just a set of documents, but with a trusted advisor who will be there for them when you cannot be.
In a future newsletter, we will go into detail about how Rutkowski Law’s planning services work, but first let’s look at how DIY planning can go wrong by looking at five of the most common failures you are likely to encounter when using online DIY estate planning documents, instead of working with a lawyer.
A typical set of documents that you get from an online DIY estate planning service (and even many estate plans created by lawyers) will usually include three to five basic legal documents: a Will, a Financial Power of Attorney, a Healthcare Power of Attorney, a trust, and a legal guardian nomination, if you have minor children. By now, it is common knowledge that these are the legal documents needed in case you become incapacitated or when you die.
What isn’t common knowledge and what isn’t adequately covered by any online legal document service, or even by some lawyers, is what strategic planning needs to go into those documents, and what’s needed to ensure those documents work for the people you love when they need them.
Standard documents simply cannot address the real-life complexities of your family dynamics, your assets, and the ever-changing circumstances of your life. Contrary to what the DIY services would like you to believe, estate planning is not a one-size-fits-all or a once-and-done kind of deal. Even if you think your particular assets and family situation are simple, that turns out to almost never be the case, and you are likely to face one of the following issues that can leave your loved ones at risk.
An ironic thing about estate planning is that the one legal document everyone thinks they need most is the one legal document that accomplishes the least. Yes, you know you need a Will, but a Will alone doesn’t do much.
A Will can ensure the people you choose are the ones who handle your affairs and who ensure your assets go where you want them to go in the event of your death. But a Will does not keep your family out of court. In fact, relying on a Will alone ensures your family and friends must go to probate court when you die. Plus, a Will does not even come into play if you are incapacitated. If you have minor children, relying on a Will alone to designate their legal guardians could leave your kids vulnerable to being taken out of your home and into the care of strangers.
You could have the best documents in the world, but if you fail to sign them, or sign them improperly, they will fail. We have worked with family after family who brought us an estate plan after the death or incapacity of a loved one that we were not able to support them and act upon because the documents were either not signed or were signed improperly.
To be considered legally valid, certain estate planning documents like Wills must be executed (signed & notarized) following very strict legal procedures. For example, many states require that you and every witness to your will must sign it in the presence of one another. If your DIY Will doesn’t mention that condition (or you don’t read the fine print) and you fail to follow this procedure, the document can end up worthless.
If you have already started to create or have created a DIY estate plan and want help correcting the issues it creates, Rutkowski Law Firm can help.
State laws are also very specific about who can serve in certain roles like executor, trustee, or financial power of attorney. In some states, for instance, the executor of your will must either be a family member or an in-law, and if not, the person must live in your state. If your chosen executor doesn’t meet those requirements, he or she cannot serve.
Furthermore, some states require the person you name as your executor to get a bond, which is like an insurance policy, before he or she can serve. Such bonds can be difficult to get for someone who has a less-than-stellar credit score. If your executor cannot get a bond, it would be up to the court to appoint your executor, which could end up being someone you would never want to manage your assets or even a third-party professional, who could drain your estate with costly fees.
Unless your family knows exactly what assets you own and how to locate and access those assets, that property is as good as gone when you die—and your online will won’t be of any use to your family. Currently, there is more than $50 billion worth of unclaimed property sitting in the different state Departments of Unclaimed Property across the U.S. because a family member died, and their loved ones lost track of their assets. To ensure that none of your assets end up in our state’s Department of Unclaimed Property, and your family will know exactly what you have and how to find everything if something happens to you, it's essential that you keep a regularly updated inventory of all your assets. 5. Unforeseen Conflict Between Family Members Family dynamics can often be quite complex. This is particularly true for blended families, where spouses have children from previous relationships. A DIY service cannot help you consider all the potential areas where conflict might arise among your family members and help you plan ahead of time to avoid such disputes. Even the best set of online documents will be unable to anticipate and navigate these complex emotional matters. Working with an attorney who specializes in these types of documents, however, can.
Too frequently, we see families face unfortunate consequences related to poor estate planning. We also see families brought closer together because they handled these matters the right way, or from putting proper planning together in the first place. When done right, the estate planning process is a huge opportunity to build new connections within your family, and our attorneys are specifically trained to help you with that.
In fact, preventing family conflict with proactive estate planning is our special sauce and one of the primary reasons to work with us, rather than relying on DIY online planning documents.
When it comes to estate planning, the documents you use are only as good as the understanding your attorney has about your family dynamics, the nature of your assets, and how the law will apply to your situation upon your death or incapacity. In most cases, you will need far more than just a few fill-in-the blank documents to properly address all of those complexities.
If you truly want things to be as simple as possible for the people you love when something happens to you, you want a trusted counsel who can prepare an estate plan that will achieve your desired objectives with a minimum amount of stress and conflict for the loved ones you are leaving behind, not just someone who has the best documents. This is where Rutkowski Law Firm.
If you’ve yet to do any planning, contact us, to schedule your Initial Consultation. During this meeting, we’ll take you through an analysis of your assets, what’s most important to you, and what will happen to your loved ones when you die or if you become incapacitated with and without planning in place.
As part of our planning process, we work with you to inventory all your assets to ensure that they are properly titled into your trust planning documents and are protected. We take the time to get to know your family members and include them in the planning process, so everyone affected by your plan is well-aware of what your latest planning strategies are and why you made the choices you did, along with knowing exactly what they need to do if something happens to you. If you are the parent of minor children, we will put safeguards in place to ensure that your kids are never placed into the care of strangers, even temporarily.
Finally, and perhaps most importantly, our Virtual Proven Process (The Rutkowski Way) will ensure that it’s not just your money and tangible assets that get preserved and passed on, but also your family’s intangible legacy, which includes your family’s most treasured values, insights, stories, and mementos. We capture and record your family’s legacy using a unique process which is included with every estate plan we create. We have included a link to our Proven Process below:
In our experience, we have learned that estate planning is about far more than planning for your death and passing on your assets to your loved ones, it’s about planning for a life you love and a legacy worth leaving by the choices you make today.
We are specifically trained to educate, empower, and support you to make the right decisions for the people you love, and get to know what really matters most to you. Furthermore, because your plan is designed to protect and provide for your loved ones in the event of your death or incapacity, we aren’t just here to serve you—we’re here to serve your entire family.
In the end, our Proven Process goes far beyond simply creating documents and then never seeing you again. We will develop a relationship with you and your family that lasts not only for your lifetime but for the lifetime of your children and their children if that’s your wish.
While the DIY approach might be a good idea if you’re looking to build a new deck for your backyard, when it comes to estate planning, it’s one of the worst choices you can make. Are you really willing to put your family’s well-being and wealth at risk just to save a few bucks? If you want to truly do right by those you love, give us a call to get your planning process started today.
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