Estate planning is a crucial task that ensures your assets are distributed according to your wishes after your death. These days, however, there are a myriad of “DIY” estate planning options, especially online. While DIY estate planning might seem like a cost-effective and convenient solution, it carries significant risks. Here’s why you should think twice before attempting to handle your estate planning without professional assistance.
- Changing Laws: Estate laws frequently change, and keeping up with these changes is essential to ensure your plan remains valid and effective. DIY plans offer a one-time solution, but do not offer ongoing advice or oversight in your estate plan.
- State-Specific Requirements: Different states have unique requirements for wills, trusts, and other estate planning documents. Missing even a small detail can cause major issues.
- No Legal Advice: The process of choosing your own answers means there is no legal guidance in answering those questions – if you have any doubts or questions, you don’t have a lawyer to discuss those questions with.
- Forms Drafted by Computer Programmers: The final document produced was written by a computer program – in other words, a computer programmer, rather than an actual attorney.
- Improper Document Execution: Legal documents must be executed correctly to be valid. This often includes specific witnessing and notarization requirements.
- Incomplete Planning: DIY tools may not cover all necessary aspects of a comprehensive estate plan, leading to gaps that could cause problems later.
- Estate Taxes: Proper planning can minimize estate taxes and maximize the inheritance for your beneficiaries.
- Income Taxes: Certain estate planning decisions can have income tax implications for your heirs. A professional can help you understand and plan for these consequences.
- Property Taxes: Recent changes in California law have greatly affected Property Tax planning and implications for all homeowners in California. Consulting with a professional can help avoid landmines and minimize risk of reassessment.
- Trusts: Properly structured trusts can provide significant protection for your assets, but setting them up correctly requires expertise.
- Beneficiary Designations: Ensuring that beneficiary designations on accounts and policies align with your overall estate plan is critical.
- Ambiguities: Poorly drafted documents can lead to ambiguities that cause disagreements among beneficiaries.
- Lack of Legal Support: Without an attorney to defend your intentions, your estate plan is more vulnerable to challenges.
- While You’re Still Alive: There was once a woman who took her DIY documents to an estate planning attorney to ensure things were done correctly. The attorney quickly discovered that during the DIY process, the woman was asked, “do you have any issue?” The woman, not aware that “issue” is a legalese word meaning “descendants,” confidently clicked ‘no’ because she didn’t feel like she was having any issues at all! She therefore accidentally omitted her own children from receiving anything in her estate plan.
- After Your Death: It is unfortunately all too common for DIY documents to cause undue heartache and strife, and ultimately cost untold thousands and years of wasted time to resolve mistakes. This can often be orders of magnitude more costly than the supposed “savings” of time and money through DIY estate planning.
- Expert Guidance: An experienced estate planning attorney understands the complexities of the law and can help you navigate them effectively.
- Customized Plans: Professionals create tailored plans that address your unique needs and goals.
- Ongoing Support: Estate planning attorneys provide ongoing support to update and adjust your plan as your circumstances change.