DIY Estate Plans: Is it that easy?

In this day and age, do-it-yourself projects are all the rage, from DIY home improvement to estate planning and asset protection. However, much like the DIY blunders featured on networks like HGTV and the DIY Network, well-meaning estate planners can find themselves similarly situated in a mess of unenforceable documents and unforeseen headaches.

If you are considering a DIY estate plan, we encourage you to consider the following pros and cons, and be sure to contact Lovett & Lovett Co., LPA if you have questions about implementing a plan or making changes to an existing portfolio.

What is DIY estate planning?

For those who are unfamiliar, DIY will and estate planning generally refers to the process through which an individual—without the assistance of an estate planning attorney—embarks on the process of downloading, drafting, and executing the various components of an estate plan, which could include any of the following:

  • Last will and testament
  • Revocable living trust
  • Powers of attorney
  • Living will

Oftentimes, these documents are available on sites like LegalZoom.com and the like, typically for a one-time flat fee. Users will sign up for the services, select their jurisdiction, and print out the documents they choose with instructions on how to execute under their state’s specific laws. In some cases, users can pay an additional fee to speak to a lawyer directly about their situation; however, the typical DIYer usually carries out the entire process without the direct assistance of estate planning counsel.

Benefits of DIY Estate Planning

There are several palpable benefits to DIY estate planning, namely the ease and convenience of the web-based process.

First, DIY estate planning may be less expensive than the traditional preparation with a law office that has experience in estate planning. For an individual with an exceptionally simple and modest estate—such as one with only one beneficiary and no significant assets—the DIY model may be preferable to purchasing an estate plan from a law office. However, without direct attorney involvement, it may be difficult for the individual to determine if his or her situation is, in fact, a simple one.

DIY estate planning services may also be desirable if one needs a certain document immediately, such as on a weekend or holiday. While this scenario is rare, it is possible to imagine a situation in which an individual needs to execute a power of attorney right away, which may be possible using an online service and a weekend notary. Again, however, rushing through the process under stressful circumstances inevitably invites the possibility for error, which would then require an experienced estate planning attorney to fix the error anyway.

Problems with the DIY Method

Much like the trouble that befalls homeowners as they embark on a DIY home improvement project, DIY estate planners can also make mistakes, wrong turns, and costly errors. And, like on TV, inexperienced DIYers often find themselves paying much more in the long run for the intervention of a seasoned professional, leading many to ponder why they didn’t just choose this route in the first place.

First and foremost, proper estate planning takes experience, knowledge of the law, and the ability to custom-fit the client’s situation to a set of documents drafted to meet his or her needs. Unfortunately, DIY will services generally employ a one-size-fits-all approach to the process, which may not adequately address the needs of every individual. Moreover, DIY services may fail to take into account any of the following:

  • Probate avoidance
  • Estate tax issues
  • Business succession
  • Intra-family dynamics
  • Capacity
  • Particular wishes concerning burial, cremation, or memorial services
  • Organ donation wishes or anatomical gifts
  • Charitable donations
  • Special needs beneficiaries
  • Long-term care planning

As you can see, the issues discussed in an estate planning consultation are highly nuanced and often require the consult of a seasoned estate planning professional, such as those at Lovett & Lovett Co., LPA.

What could go wrong?

As mentioned above, the DIY estate planning model is generally not the best way to go except with an extremely simple, straightforward estate—and for good reason.

One of the over-arching concerns with DIY legal work of any kind is the need to follow formalities set forth under Ohio law. For instance, the person making a last will and testament (known as a “testator”) must sign it in front of two witnesses able to attest they saw the testator sign the document when the testator was:

  • At least 18 years old at the time
  • Not under undue duress, and
  • Mentally competent

For the DIYer, these formalities may fall by the wayside, resulting in an invalid will when the time comes to commence probate. The same formalities also pertain to powers of attorney and living wills, two documents that can become absolutely necessary at a moment’s notice.

Another glaring problem with the DIY structure is that, in exchange for that reduced cost, customers do not have direct access to necessary information from an actual attorney, meaning they could unknowingly overlook many issues in the estate planning process.

Let us consider the story of a wealthy DIYer who copied a last will and testament from a library book and left his $7 million estate to his wife. Seems simple enough, until one considers the estate tax implications of such a scenario.

While the husband’s estate did not have to pay the estate tax at the time, the wife’s estate later had to pay nearly $3.5 million. Had the man taken the time to visit with a knowledgeable estate planning attorney, his heirs would likely not have had to bear the inevitable estate tax penalty, potentially increasing the estate’s net worth by dramatic margins.

Consult a Knowledgeable Ohio Estate Planning Attorney

If you would like to learn more about the estate planning process and why you should consider working with the professionals at Lovett & Lovett Co., LPA, contact us at either our Tipp City office or our Dayton office.