An Online Will and the Dangers of DIY Estate Planning | Florida Law Blog

An Online Will and the Dangers of DIY Estate Planning

Written by Jordan W. Jacob, Esq.

April 20, 2020
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online-will-dangers

With all of the media attention towards “online wills” and “DIY estate planning”, it could be tempting to think you can do your own estate planning online. Hey, maybe you can!  But, if you go it alone, you need to know the potential consequences.

Online estate planning is potentially dangerous and could be a big trap for the unwary – leaving your family worse off than if you had done nothing at all.

First and foremost, before you do any of your own online estate planning, it is critical to understand your family dynamics, the nature of your assets, and what the state would say should happen to your assets if something happens to you. You see, whether or not you do estate planning, the state has a plan for your assets if you become incapacitated or when you die. You need to know what that plan is, so you know whether or not you want to change it.

I Only Need a Last Will, Can’t I Just Do It Online?

Here is the funny thing about estate planning: the one legal document that everyone thinks they need most actually does the least.

Every adult does need SOME form of estate planning.  A Last Will is always a good idea because it says who gets what you have (your “beneficiaries”) and who is in charge of distributing it (your “executor”).  However, if the state’s default law: (i) gives your assets to the same people you would have chosen as beneficiaries, and (ii) gives authority to the person you would have named as executor, then an online Last Will would probably do nothing valuable for you.

A Last Will does not keep your family out of court.

If drafted improperly, an online Last Will may require your executor to obtain a bond before obtaining the the authority to act on behalf of your estate.  A bond is like an insurance policy to ensure the probate court that the executor will perform their obligations.  Bonds can be hard for an executor to obtain, especially one who has less than a stellar credit score.  If your named executor cannot get a bond, the probate court would appoint its own executor and that can be costly for your estate.

This is just one example of how having a Last Will that is prepared online can create more expense for the people you love. Unfortunately, all of the online will preparation solutions I have reviewed do not even mention this risk or many of the other risks!

So, yes, you can do your own Last Will online, but at what potential cost for the people you love?

Some questions you should ask before making an online will?

  • State laws, tax laws, and federal laws all apply to an estate plan >>> Does an online will help to legally avoid, minimize, or take into consideration any tax laws?
  • Most family fights after a death do not happen over money, but lack of clarity >>> Does an online will provide your family with clear instructions how to manage your estate?
  • You may own sentimental items or family heirlooms >>> Does an online will allow you to properly and safely pass on your most cherished assets?
  • Children get divorced, have creditor problems and make bad decisions >>> Does an online will maximize asset protection to protect an inheritance from divorcing spouses or creditors?
  • Children in blended families can accidentally get disinherited >>> Does an online will disinherit children from a first marriage
  • Beneficiaries have problems >>> Does an online will help or hurt a child with an addiction problem?
  • Special needs beneficiaries can lose government benefits if money is inherited outright >>> Does an online will protect government benefits? 
  • There are ways to keep your estate private and out of the public reach >>> Does an online will avoid probate? 

More Problems with an Online Will

An online will (and even many estate plans created by lawyers) usually include three to five basic documents: (i) a Last Will, (ii) a financial power of attorney, (iii) advance health care directives, (iv) possibly a Living Trust, and (v) a legal guardian nomination if you have minor children.

But, honestly, completing these documents without a lawyer is not sufficient to guarantee your estate will be taken care of as simply, affordably, and effectively as you would wish.

There have been far too many scenarios where seniors, even those who had some estate planning done, get caught in the court system or even declared incompetent, and then have a court-appointed guardian drain their accounts. In many cases, their assets are taken before they can get to their kids. You do not want that to happen to you or your family, right?  If not, a do-it-yourself estate plan will not keep that from happening.

What about making sure your family knows what you have and where it is?  An online Last Will does not tell them that. There is somewhere between $49 billion and $80 billion being held in state departments of unclaimed property across the United States because someone died and their family lost track of their assets.

How can you be sure you have everything covered, legally?

With online wills and DIY estate planning docs, you would not even know what questions to ask to uncover the potential risks to the people you love, who deserve to receive what you have created in your life, without a big mess.

A large majority of online estate planning websites and tools do not have an attorney on staff or an attorney to review your final documents.  Even if there are attorneys on staff at these online companies, they do not get to know you and your family dynamics enough to spot the real issues that could arise.  They are, instead, focused on a generic, one-size-fits-all solution and easy answers to unknowingly complex issues.

The Kind of Help Your Family Deserves

Lawyers who may specialize in estate planning often base their work on template documents and have limited skill in getting to the heart of your family matters.  Even if they are well-intentioned, they are working with an old, traditional system that was born around the same time as word processing, and the lawyer’s focus is still very much on having the “best” documents.  Not to mention, these lawyers are using outdated hourly billing models, so you may be getting charged for unnecessary work.

Furthermore, the documents used in your estate planning are only as good as the understanding a lawyer has about your family dynamics, the nature of your assets, how the law will apply to your situation, and how the documents can be written as simply as possible to achieve your wishes. You need much more than just a set of four or five filled-out template documents to address all those complexities.

The way I see it, if you want things to be as simple as possible for the people you love, when something happens to you, you want your estate planning lawyer to prepare a plan that achieves your desired objectives.

As a Personal Family Lawyer®, this is where I come in. I have specific training in how to educate you, empower you, and support you to make the right decisions for the people you love, while we get to know what really matters to you. I do this through my Family Wealth Planning Session process.

If, as a result of the process, I see that you really do have a very simple situation, and you want to create your documents yourself online, I can help you with that. I have designed easy-to-use online estate planning form builders to create your own basic estate planning documents at discounted rates. You can even do it from your phone!  Unlike those other online websites that are not run by lawyers, I prepare your final estate planning documents using your intake questionnaire results.

If, as a result of the Family Wealth Planning Session process you decide you do need me to draft a plan for you, I work with you to choose the right planning package and fee for your needs and goals.  I take only 6 to 8 new clients through the Family Wealth Planning Session process each month, so I can ensure that the clients I work with get the attention they need to create a plan that actually works for the people they love.

Additionally, I inventory your assets, ensuring they are all owned in a way that will keep your family out of court (if you wish) and conflict (which you surely do); and ensure everyone named in your plan has what they need and understands your choices.  Most importantly, I ensure you understand your plan, that you pass along more than just your money, and that you keep your plan updated as changes happen in your life.

Do it yourself estate planning is risky.  While it may be better than nothing, it may also be worse.  Unfortunately, it will not be until after you are gone that your loved ones find out that answer.

If you want to do the right thing by the people you love, you have three options for how to get started:

1. Schedule a Family Wealth Planning Session with me. It is normally $750, but if you refer to this article and commit to doing just a bit of homework ahead of time, I will waive that fee.

2. If you are not quite ready to schedule a Family Wealth Planning Session, and want to learn a little more first, start by creating your own Personal Resource Map. This tool will help you get your estate planning needs and goals better organized and give you a sense of the detail that goes into a properly designed estate plan.

If you send me your completed Personal Resource Map, I will not only waive the $750 Family Wealth Planning Session fee, but I will also give you a $250 credit towards any planning package you need. Be sure to mention that you want to claim your $1000 of legal services!

3. If you are not ready for either of the first two options, and want to talk for 30 minutes before your Family Wealth Planning Session, schedule a no-cost initial consultation with me.

I look forward to getting to know you better, understanding your individual needs and goals, and working with you to plan for your future with confidence!

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From Jordan W. Jacob, Esq. to Everyone: 03:05 AM