THE RISK OF THE DO IT YOURSELF ESTATE PLAN
There are a growing number of online estate planning services available to the public. They can quickly produce wills, trusts, powers of attorney, and other essential estate planning documents. They claim these “Do-It-Yourself” online will or trust kits are a viable alternative to a license attorney. What are the pros and cons of these online document preparation services that use software and questionnaires to estate plans?
The most obvious benefit of a “Do-It-Yourself” estate planning is that it’s less expensive than having a lawyer draw up your documents. Attorneys charge a wide range of prices and fee arrangements for estate with $2,500 being a common flat fee for a standard revocable living trust and powers of attorney for a single person. A married couple might expect to pay around $3,500. Owners of large and complex estates may expect to pay up to $10,000 or more for an estate plan prepared by an attorney. Do-It-Yourself wills may cost a little as a $89. It’s easy to see why these document preparation websites get plenty of traffic with such a large up-front savings.
The initial savings is easy to quantify. The Do-It-Yourself estate planner, however, will probably not be alive if and when a problem with the computer generated trust arises. The estate documents are often filed in a secure location and forgotten about until it’s time for the successor trustee or executor to take charge of the estate. If the documents are incorrect the cost of hiring legal counsel to sort out the problems can quickly exceed the money saved by going down the do-it-yourself path. With the advent of the do-it-yourself dot-com estate planning industry a parallel industry for lawyers has emerged that deals with problems that commonly arise for the do-it-yourselfer.
Many of the problems arise from an inadequate understanding of the terminology used in estate planning. The legal jargon used in the law of estates, and embedded in estate planning documents, is confusing. Simple mistakes, such as naming someone trustee rather than successor trustee, or calling a trust irrevocable when it should be revocable, can be profoundly costly mistakes. Often the only way to fix a problem with an incorrectly drafted trust is by filing a petition within the district court. Attorneys generally charge between $200 and $500 per hour for this kind of work.
Another common and expensive mistake occurs when a trust is established and not properly funded. If the goal is to avoid probate, the do-it-yourselfer must properly fund the trust. This involves transferring legal ownership of property to the trustee to be managed according to the terms of the trust for the good of a beneficiary. If an asset is left out of the trust an expensive and time consuming probate may result. In this situation the advice of an attorney would have been less costly than the unintended probate.
Also, if you use a website instead of an attorney, you won’t have the attorney-client relationship. At the commencement of the representation we closely with our clients to understand how we can help you achieve their estate planning goals. We want them to understand and be in control of their estate even during incapacity or after death. We also make house calls to execute the documents in the client’s comfort of their home. Perhaps most importantly, the policy of the Living Trust Source is to provide ongoing support to our clients long after we help them create their estate plan. This means we never charge our clients if they, or their family member calls us for simple advice. We take the time to answer our client’s questions because our goal is the success of every estate plan we create.
Do-it-yourself estate planning may work for people who take the time to thoroughly understand the documents they generate. For most people, however, the risk associated with the do-it-yourself approach outweighs the benefits of working with a qualified estate planning attorney.
Attorney at Law
1Source Law & Living Trust Source
Estate Planning Attorney Reno, Nevada