5 Ways DIY Estate Plans Can Fail and Leave Your Family at Risk — Part 1
If you search for “digital wills” or “online estate planning,” you'll come across numerous websites providing low-cost, DIY, and sometimes free estate planning documents, including wills, trusts, powers of attorney, and healthcare directives. Services like LegalZoom®, Rocket Lawyer®, TrustandWill.com, and FreeWill.com make these DIY documents appear to be an inexpensive and convenient way to manage your estate planning without the hefty fees charged by attorneys. This is similar to how people have been filing their taxes online for years. But is estate planning really that straightforward? Aren’t these websites using the same forms that lawyers use?
The Hard Truth
The idea that DIY and online estate planning is just as effective as hiring a lawyer is misleading. In fact, relying on these services can be one of the costliest mistakes for your loved ones. Just because you've created "legal" documents doesn't guarantee they will work when needed most. Without a solid understanding of family dynamics, asset nature, and the legal process after death or incapacity, serious mistakes are likely with DIY or online estate plans.
Moreover, these mistakes often surface too late, leaving your loved ones to deal with the fallout, potentially involving lengthy and expensive court proceedings. In many cases, using DIY or online estate planning documents can be worse than having no plan at all.
A False Sense of Security
Creating an estate plan using online services can give you a false sense of security. You might believe your estate planning is complete when it’s actually not. This misplaced confidence can lead you to postpone proper planning until it's too late. Relying on DIY documents can be more dangerous than not planning at all, as the supposed completion of your estate plan may cause you to neglect the necessary steps to truly secure your family's future.
Planning to Fail
The main goal of estate planning is to prevent court involvement and family disputes in the event of your death or incapacity. However, with the growing popularity of cheap online document services, many people are discovering—or will discover—that DIY estate planning can complicate matters, making things more difficult and expensive for loved ones.
Most people assume estate planning is about filling out the right forms. However, the real value lies in the planning process, not the documents themselves. Proper planning involves understanding all potential problems, conflicts, and opportunities, and then creating documents that address these issues. Without this, your documents, such as wills, trusts, health care directives, and powers of attorney, are virtually useless.
The value of effective estate planning is in having a trusted advisor who can guide you through the process, anticipate issues, and help you create a plan that ensures maximum benefit and minimal heartache for your loved ones. This is exactly what our Personal Family Lawyer® firm provides through our Life & Legacy Planning Process.
In a future article, we will explain our planning services in detail. For now, let’s explore how DIY planning can go wrong by highlighting five common failures you might encounter with online estate planning documents.
One Size Does Not Fit All
“In preparing for battle, I have always found that plans are useless, but PLANNING is indispensable.” –Dwight D. Eisenhower, Former U.S. President and WWII Allied Forces Commander
A typical set of documents from an online estate planning service (and even from many lawyers) usually includes a will, a financial power of attorney, a healthcare directive, possibly a trust, and a legal guardian nomination if you have minor children. While it’s common knowledge that these documents are necessary, what isn’t well-known is what needs to be included in them and how to ensure they actually work for your loved ones.
Standard documents cannot address the complexities of your family dynamics, assets, and life circumstances. Estate planning is not a one-size-fits-all process, and even if you think your situation is simple, it rarely is. You are likely to encounter issues that can jeopardize your plan.
5 Ways Your DIY Estate Plan Can Fail
Thinking a Will Is Enough
The ironic thing about estate planning is that the document everyone thinks they need most, a will, accomplishes the least. A will can ensure your chosen people handle your affairs and distribute your assets, but it doesn’t keep your family out of court. Relying on a will alone means your family will have to go to court when you die. Plus, a will doesn’t help if you become incapacitated. If you have minor children, a will alone could leave them vulnerable to being taken into care by strangers.
Improper Execution
Even the best documents are useless if they aren’t signed or are signed improperly. For certain estate planning documents like wills, strict legal procedures must be followed for them to be valid. For example, many states require you and your witnesses to sign your will in each other’s presence. If you don’t follow these procedures, your document can be invalid.
If you’ve created or started a DIY estate plan and want it reviewed, contact us. We offerent a Legacy Planning Session at no cost to you. During this session, we will review what would happen to your family and assets with your current plan and discuss the best steps to protect your family.
This article is a service of Zarda Law, S.C. We do not just draft documents; we ensure you make informed decisions about life and death, for yourself and the people you love. That's why we offer aLegacy Planning Session, during which you will get financially organized and make all the best choices for the people you love. You can begin by scheduling a Legacy Planning Session and mention this article to find out how to get this $750 session at no charge.
