In this tight economy, people are always looking for value. Budget options are popping up in every industry, from substandard tires to refurbished televisions. Some even view legal services this way. Let’s face it; folks do not want to pay top dollar for a product they will never use. This is the plight of estate planning. The one who pays for a will or trust will never personally use it. Instead, that individual’s children will be using it to ensure things go right later. Even tools like powers of attorney are created many years before their intended use. Much like passive investing in a 401(k), these are purchases that may not truly prove their value for decades. Naturally, many are turning to low cost DIY form providers, and worse yet, office supply stores, in order to create their estate plan.
While the Internet is full of attorneys and other experts who strongly oppose these DIY options, you may be surprised how many lawyers love Legal Zoom and its kindred. Here are 3 big reasons why experienced attorneys love DIY estate plans.
Litigation is far more expensive than skilled estate planning
Nothing can tear apart a family like divorce and estate litigation. Estate litigation can be particularly nasty, because it generally involves siblings fighting rather than spouses. Whether it is a fight over the validity of a will or trust or a dispute over who should act as a guardian, families routinely become immersed in court battles over things that can be easily avoided through careful planning.
In a will contest, someone who would normally be entitled to inherit from a deceased person comes forward and challenges the authenticity or validity of the will. It is very common to see wills that have generic provisions that sound good to the untrained eye, but upon a court’s inspection fall short of validity.
For instance, some wills may include a clause indicating how final distribution of assets should be made, which, when applied as written, can result in unnecessary tax consequences. Similarly, without a skilled attorney present, many people fail to name successor executors or fail to consider other beneficiary designations, such as where life insurance is going or who gets 401(k) funds in the event of death. Further, powers of attorney may not automatically grant agents the authority to make changes to the estate plan that would be helpful to protect assets in the event of long-term care. Therefore, many people find themselves embroiled in costly litigation for years, due to ambiguities contained in generic planning documents.
2. People who use DIY wills, trusts, and powers of attorney will usually need help fixing mistakes
Just as with litigation, if powers of attorney are poorly drafted for one spouse, it may result in having to make large changes to the other spouse’s estate plan in order to preserve assets. And families who use generic DIY trusts often do not understand the proper way to fund the trust. Therefore, they must still come to an elder law attorney to figure out how to use and administer the trust during their lifetime. This usually results in a complete re-writing of the trust and a host of other corrections that may be more expensive than if they had simply gone to the attorney first.
3. An attorney’s value goes up as a client sees just how much goes into the estate plan
When families have to sit down with an elder law attorney, many are astounded at the complexity of making these careful and informed choices. By seeing the many ways their generic DIY options were insufficient, families immediately begin to see the tremendous value of seeking competent legal assistance.
So, when it comes to one’s final wishes, it is a decision far too important to leave to a box on the office supply store shelf. Nevertheless, using these low cost resources only drives up the cost of attorney fees later when litigation ensues. In that regard, these DIY resources indeed are sometimes more beneficial to the attorneys than the clients.