I hear about a new online DIY estate planning service launching every month and they advertise this time of the year. Why? Because many people decide that their new year resolution is to get their estate plan in place and the online companies know this!
When I was in my 20s, I thought this type of estate plan would be fine for my family. After all, I am a lawyer, and I did not have much cash. I had a home, a pension, and life insurance but I did not think about those items.
Luckily, I never had to test it out because I now know I would have left my family with a big mess if I did.
Please know that I am not saying these services are not good and cannot be helpful. There are times when a DIY Estate Plan is best for a family, and my firm will tell people not to waste their money and go that route.
Since beginning our Estate Planning Services, the majority I have seen did not meet the goals the family wanted to accomplish.
Let me tell you why they are not for many families:
1. Undesired Results
Using a DIY estate planning program or other estate planning kits may have undesired consequences.
Violations of state law are not readily apparent and may only be revealed after death when it’s too late to revise documents. Survivors may find that a will devised from the program doesn’t accomplish what the deceased wanted, and the local courts won’t allow changes. Many parents do not want their survivors to be involved in the court system and go through probate. The majority of DIY wills require a court to be involved.
2. The people you have assigned as agents are not the best individuals to meet your goals.
Having the right people to step in on your behalf is essential. You do not want someone who lives out of the country to be your Financial Power of Attorney and speak with your banks, etc., because they would not be able to do business during regular business hours. It is best to have your Executor living in Texas.
If you have children, you want to choose guardians who will raise your children how you wish them to be raised.
Also, it is essential to have a back-up and back-ups to back-ups. Most DIY wills do not allow you to choose multiple people.
3. Your family is unique.
Very few families are traditional family units in this day and age. Your estate plan must reflect your uniqueness; an out-of-a-box form will not meet your needs.
For example, many parents have been married more than once or have had more than one relationship that produced children or stepchildren. When parents draft DIY documents leaving an estate to their “children,” legal chaos can ensue. It often takes a court to determine what a parent wants to accomplish. Did he want to leave his property to his extended family (stepchildren included) or to his biological children?
Some families have parents who have not been married under Texas law. Under this scenario, the state can void the estate plan because it contradicts Texas law. It is crucial that a lawyer carefully drafts language to protect your partner’s rights, your assets, and any children shared between the two of you.
Meanwhile, there are families where only one parent raises the child, and the other parent is not involved in the child’s life. If something happens to you, it would be important that the distant parent does not get custody of the child. Most DIY plans do not protect your child from the disconnected parent.
An out-of-the-box plan can create conflict because it can cause confusion and hurt feelings. When you work one-on-one with an attorney, they can help you prevent unnecessary fights.
4. Special Rules for Special Needs Children
Over 4 million children are receiving Social Security and other governmental benefits, and they could be impacted if they acquired assets in their name. Special needs trusts work within the complex rules and restrictions of government-managed disability benefits, and DIY estate planning plan probably will not account for these special rules.
5. Where are your Assets
DIY plans don’t help you create an inventory of your assets. I once saw an asset inventory created by a well-educated family. The list was short and sweet. I walked them through the list and asked them follow-up questions. They had forgotten about some of their assets. If they did not work with an attorney who counsels them, there is a good chance those assets would be ‘lost’ and end up on the State’s Unclaimed Property list if something happened to them.
6. State Probate Laws Vary
Every state has different laws, and keeping up with them is challenging. On top of state laws, the federal government often changes estate and gift tax laws based on who is in office. As a Texas licensed attorney, I stay informed about current state and federal laws and upcoming changes that are coming down the pipeline.
Finally, a good estate plan is a living document, not a one-and-done document. Because your life changes (i.e., you add family members, move, new jobs), your estate plan should change with your life. At Scion Law Firm, we follow up with you every three years at no charge to ensure your project meets your goals.