In addition to my day job and running a few websites, I also own and run a small legal practice where 99% of my matters have to do with estate planning and administration. Every client is a referral which inherently builds a nice network of traceable people I have helped discover and implement their testamentary intent.
I was sitting with one of these referrals the other day when she asked me a pretty direct question regarding my thoughts on using Do It Yourself Will Preparation Services. I was taken back by the question as we had already been sitting for the better part of 2 hours. I have thought about the topic in the past, but had never been asked by a potential client since all clients are referrals from someone who was happy to have me guide them through the very personal process that is estate planning. Given that I had thought about the topic before I knew exactly how to express my thoughts on the topic.
You Don’t Know What You Don’t Know
It is analogous to doing your own taxes. Sure, TurboTax or similar program can walk you through what you have and try to find appropriate deductions, but there is value to sitting down with a CPA who can explain how a simple reorginizaiton of a business may save tens of thousands of dollars. TurboTax isn’t prepared (yet) to have a discussion of what you don’t know you don’t know.
Common Estate Planning Issues That Software May Not Warn You About
I don’t think I could adequately prepare a blog post about all the things someone should become well versed in to prepare their own will. Not only would it be an inappropriate place to teach anyone about the law, there is the problem of attempting to put more than a decade of experience inside a thousand words. Notwithstanding, explaining just a few issues that are likely not addressed in software (or worse just copying a word document) may bring value to the interwebs by dissuading just one person to seek appropriate legal counsel.
What Can a Trust Be Used For? What Can’t it Be Used For?
Trusts, whether we are discussing testamentary trusts or inter vivos trusts, are powerful tools yet they are shrouded in mystery. Most people associate the word with trust fund babies, but they are applicable to almost every single family.
An easy example, would be 2 spouses with 2 children aged 19 and 15 – does anyone believe that a 21 year old should inherit anything without any control? Absolutely not. Well implementing a simple testamentary trust could protect that child from himself or herself by forcing them to work with a Trustee that the parents decide on to make correct and appropriate decisions. But for how long? Experienced Counsel may be able to walk you through an appropriate distribution schedule and without a legal background you couldn’t possibly know you didn’t know about rule against perpetuities which limits the length of trusts in certain states.
Want a more complex example? What about the use of certain types of trusts which could prevent the possible inadvertent disinheritance of your children? 2nd Marriage each spouse has children from a previous marriage, but they use an online tool and come to the conclusion because they love each other everything should pass from spouse to 2nd spouse then to 2nd spouse’s children. However, if 2nd spouse never adopts 1st spouse’s children then they are now cut off. Sure, 2nd Spouse could name children from both spouses, however, a will can be changed any time before death (minus one rare instance of a joint will). A simple QTIP Trust may solve this issue, but you didn’t even know to look up the issue.
Execution of a Last Will and Testament
Every State has different requirements when it comes to the execution of a Will. In New York for example, among other requirements, a Will needs to be witnessed by 2 disinterested witnesses within 30 days of each other. There are a litany of Surrogate’s Court cases that have tried to overcome the word “disinterested.” Simply knowing that you can’t have an interested witness be one of the 2 witnesses is information that most people wouldn’t know that they don’t know. One would have to know what interested as it relates to will even means? Improper execution is a pretty easy way to challenge a will.
Want a more interesting example than witnesses? Some States allow for handwritten Wills also known as holographic wills and some States do not! Imagine you sat down with your spouse you hand wrote your wishes and wants, somehow guess that you need a few witnesses and then it is thrown out because it is handwritten?
Special Needs Planning
Parents of children with special needs are particularly susceptible to the world of not knowing what they don’t know when it comes to estate planning. This is because their inheritance schedule involves a whole other area of law other than estate planning. They have to worry about medicaid laws, and while most will know they have to at least worry about medicaid, most won’t know the specifics.
A simple example would be if you left all your assets from spouse to spouse then to your 2 children age 30 and 35. The 30 year old has down syndrome and will need government benefits for the rest of her life. If both parents were to pass and leave an inheritance equally between the children the government would kick the 30 year old off mediciad expect her to use all her assets then reapply. Alternatively, let’s say the parents had some semblence of an idea that may occur, and instead leave everything to the typically developing 35 year old. Now those assets are subject to the 35 year old’s creditors, and spendthrift ways. Not knowing how the areas of law merge and work to actually help families with children with special needs could be disastrous.
Legacy Planning Should be Done by a Qualified Professional
I do not mean to just focus on the software aspect of estate planning. The legal issues raised throughout the post would often be missed by your run of the mill criminal defense counsel, just as I would likely miss issues if I were handed a criminal defense case.
Please use proper legal counsel when implementing your estate plan!