As the number of online websites offering Do-It-Yourself legal documents and estate planning software continues to grow, it’s important to remember that a poorly executed estate plan can cause more harm than good to your family and loved one’s after you’re gone.
Doing nothing is the worst thing you can do.
It’s important to realize that estate planning is a complex area of law, based on statutes that vary state by state and often change from one year to the next. Wills in the state of North Carolina have certain procedures that must be followed, and it isn’t always easy to read or understand. An estate planning wills lawyer in North Carolina knows what those stipulations are and can help you.
So What’s Good About DIY Wills?
Really, the only good thing about DIY wills and trusts, is that they could possibly save time and money. While a DIY will or trust costs less in the interim, we have found no case is ever simple enough for a “one size fits all” situation, and will in fact only cause issues in the long-run.
The Dangers of DIY Estate Planning Documents
A DIY situation that’s supposed to save money can easily result in estate losses of tens of thousands of dollars. If using a DIY will to avoid paying legal fees, you may just create more fees in the future.
The primary danger with DIY estate planning is that they give a person a false sense of security. You may believe that your affairs are in order, when in all actuality, something was not done correctly, rendering the document you created useless. Online document mills are prohibited by law from dispensing legal advice, therefore they can not advise you of the forms you really need to protect your family and assets, nor will they represent you in court should it become necessary.
This can happen with wills and trusts because of the various laws that North Carolina imposes when deciding what makes a will legally binding.
Mistakes Can Invalidate Your Will
Online retailers, such as LegalZoom, sell form wills that contain generic instructions for all 50 states. While the actual document might contain the basic nuts and bolts of a last will and testament, it cannot advise you on key state-by-state differences.
For example, in North Carolina, a will is only binding once the testator signs it in the presence of two witnesses. However, companies like LegalZoom will not inform you of the witness requirement or who is qualified to serve as a witness.
If your will doesn’t have an affidavit from witnesses and notary, upon your death, your family will need to locate the original witnesses to establish validity. This error invalidates your will, which means when you die, you don’t have a legal will. Your assets will then go through probate court, which will administer your estate and local law would determine who receives your assets.
You lose all say in who gets what.
DIY Will Programs Can Be Too Flexible
Flexibility in the will making process can actually work against you sometimes. For example, LegalZoom and RocketLawyer both allow you to edit your completed will. You are given the opportunity to put anything you wish in the special directives box. This feature could lead you to self-create clauses that contradict other elements of your will.
Shockingly enough, these companies are not required to inform you of your error. This is because their terms and conditions clearly state that they are not legal advisors; thus, they have no authority or responsibility to inform you of the mistake. In our office, we’ve seen all sorts of errors created by these online wills, including accidentally omitting a surviving spouse or other key family members.
Estate Taxes Are Complicated
Currently, the estate tax exemption is over $11 million. While estate planning attorneys may not have a crystal ball telling them what will happen with the tax code in the future, they can help you draft your plan to hedge against future changes in the estate tax laws.
Additionally, most DIY will kits do not allow you to create tax-saving entities, such as a trust. The program will automatically create the same estate structure for someone with $10,000 in assets as for someone with $10 million in assets.
This oversight can result in your estate owing substantially more taxes than if there was consultation with an estate planner. And even if the kit does include potential tax planning provisions, typically those provisions will ultimately wind up not working if you don’t properly understand how your estate plan interacts with your financial planning.
As sophisticated as a piece of online software may be, it is no substitute for an experienced professional who practices estate planning and elder law in the real world every day. It doesn't sit down in front of clients to find out what their goals are to understand their vision for their family's future. It doesn't look for opportunities to preserve assets from nursing home costs or wealth wasting in future generations. In short, you could be missing out on protecting tens of thousands of dollars tomorrow in order to save a few hundred dollars today.
How DIY Wills and Trusts Exclude Special Circumstances
Because DIY wills and trusts use very simple forms, and not every family fits these forms and using them can cause children or loved ones with special needs to be totally excluded and overlooked. A one-size-fits-all solution is not going to work if you have loved ones with special needs or a blended family.
“But what about attorneys affiliated with LegalZoom and LegalShield?”
A little-known secret about DIY document services is that one of their primary business areas is marketing for the legal services industry. Once you get to the point where you realize you’re in over your head, they will offer to refer you to an attorney and oftentimes the attorney has agreed to review the form documents for a set flat fee, and some of that fee goes back to LegalZoom or LegalShield for the service of bringing in the new client.
The issue with this is that the rates offered to attorneys to review these documents are extremely low. In order to sustain a law firm on this type of work, the review would either have to be bare-bones, or it’s a setup to an upsell.Some attorneys see this type of work as a good way for brand new attorneys to jumpstart their careers and get some experience fresh out of law school. Some attorneys have a moral uneasiness about participating in an arrangement that entices clients with one service in order to lead them to another.
At Carolina Family Estate Planning, we want to see you succeed in planning for your family’s future.
Have Additional Questions or Concerns?
Over the past several years, our team has reviewed thousands of estate planning documents from attorneys all over the country--and, yes, some documents created with the help of DIY software as well. (Document review is a service we provide for prospective clients thinking about updating their planning.)
What I've learned might surprise you. If you're curious, you should read my book, How to Choose a Will or Trust Lawyer. And if you have questions or are ready to get help from a professional on your own planning, please give our estate planning lawyers a call at (919) 335-7426 or contact us online. We’ll be happy to help you determine your next steps or point you in the direction of resources that can help you.