The Dangers of DIY Estate Planning
In recent years, our firm has seen a growing trend of “do-it-yourself” estate planning. Some people believe they can save money by creating their own estate planning documents or amendments. Whether they draft the documents themselves or use the Internet, we see many problems arise from DIY estate planning.
A DIY Trust Amendment Gone Wrong
A client of our firm, who we’ll call “Susan”, became very sick and knew she would soon pass. Before she died, she wanted to make some changes to her estate plan.
Instead of asking an attorney to draft an amendment to her trust, Susan simply wrote her own amendment on some Teddy Bear stationery. Shortly thereafter, Susan passed away. The time had come to administer her estate plan.
Susan’s handwritten amendment was very ambiguous, which created confusion regarding the distribution of her estate. The Probate Court had to help interpret what the client’s intent had been. Ultimately, the confusion created by the DIY amendment cost the client’s estate an additional $15,000.
This real-life example illustrates well why you should never attempt to create or amend your own estate planning documents.
Internet Estate Planning
In recent years, internet websites such as NOLO and LegalZoom have popped up offering do-it-yourself estate planning forms. While seemingly convenient, these websites take no responsibility for their documents if they fail to work when you pass away.
Compare this with a reputable estate planning law firm, which will take full legal responsibility for the documents they draft. If issues arise during the trust administration process, the attorney will be there to help if needed. They can review notes taken while meeting with you, memos written, and testify as to your intentions at the time you created your estate plan.
Another major pitfall is homemade amendments, and not just those written haphazardly on Teddy Bear stationary. We’ve had clients type up their desired estate planning changes and get that paper notarized, thinking that a Notary Stamp will make the document “legally binding”.
Please understand: A Notary Public’s only job is to verify that you proved your identity to them. A Notary stamp in no way validates a document’s contents.
Common Problems Created by DIY Estate Planning
Attempting to write your own legal documents can create a myriad of problems for the family members left behind. Here are common problems that result from do-it-yourself estate planning:
- Having to prove to a court that a will was executed with the necessary legal formalities
- Failing to take advantage of appropriate tax planning
- Giving gifts inappropriately (such as to minor children, beneficiaries with drug problems, or beneficiaries who are on governmental assistance, causing them to lose their benefits)
DIY Estate Planning Costs More
While clients may hope to save a few hundred dollars by doing their own estate planning, the confusion and legal ambiguity created can and often does result in tens of thousands of dollars of litigation later on. It’s probably not worth it.
Remember: estate planning law is complex and specialized. Even attorneys who practice in other areas of the law usually hire an estate planning attorney to create their estate plan. If you would like to create or make changes to your estate plan, be sure to seek the counsel of an experienced estate planning attorney.
Daniel Hunt is lead attorney and owner at Law Offices of Daniel Hunt. He is also a California State Bar Certified Legal Specialist in Estate Planning, Trusts & Probate Law.