PITFALL 4: Do-It-Yourself estate planning programs and forms
Aside from inexperienced attorneys claiming to be able to handle estate planning for domestic partners, the next things most likely to give partners a false sense of security are do-it-yourself estate planning programs or fill-in-the-blank forms. Cutting corners by cutting out the services of an experienced estate planning attorney may result in disastrous consequences. Unlike other do-it-yourself projects, people do not know that things have gone terribly wrong with their estate planning documents until it is too late to do anything about it. At that point, some has died and the estate is thrown into chaos.
Some common problems with do-it-yourself programs and forms are a time consuming learning curve and technically complicated execution processes. And even if the documents are executed properly, they may not be exactly what you wanted.
High Learning Curve
Many people using fill-in-the blank forms or computer programs are impressed by how easy it appears to do your own estate plan. “Just do A, B, and C, and you can rest easy with your own estate planning documents in place!” However, once you sit down and start following the step-by-step directions, questions begin to form and things look a little more complicated. What do you mean there may be estate taxes? What is a contingent beneficiary? What if I don’t want to leave everything to my partner and instead want to leave something to my nephew?
In order to get the computer program or fill-in forms exactly the way you want them, you almost have to become an estate planning attorney yourself. Yes, the forms technically allow you to have exactly the plan you want, but the way they do this by allowing you to customize the language. But exactly how do you word things? Unfortunately, the computer program can’t give legal advice, nor can the company that created the forms. You are essentially stuck on your own.
As a rule, good estate planning attorneys are not going to waste your money reviewing these documents at a high hourly rate. In order to find out if the documents do exactly what you want them to do, they have to go through their usual initial meetings and interviews to find out your goals. Inherent in this is educating you about the different roles of trustees, executors, power of attorney agents, and so on. Once those meetings are done, the attorney can review the document to make sure it does what you want, check it for state compliance, and then make suggestions on how to change the documents. By the time this is done, you have probably spent a half to two-thirds of the cost it would have been to have the attorney create the documents for you in the first place.
In my experience, I have found that people who do not want to spend a lot of money on having an attorney create their documents in the first place are not going to spend a lot of money making sure that the do-it-yourself documents are everything that they need to be. They usually want to hire me for “no more than an hour” to make sure their documents are OK. My firm will not do this for three reasons: 1) we can not do a good job in an hour, 2) the person will brag to everyone that their below average documents were “approved” by my firm, thereby decreasing our reputation when someone actually reads the document, and 3) when something goes wrong (and it probably will), we’ll be the ones blamed. It is not worth it to us to risk our reputation this way, and so we will turn the business down. Hopefully down the road they will come to their senses and ask our firm or another competent attorney to create the documents for them.
Complicated Execution Process
A specific problem with the learning curve deserves its own mention, and that is executing the documents with the correct formalities. (Buy executing the documents, I mean that it is signed and witnessed according to state law). It deserves separate mention because it is probably the most common problem, and it is also the most fatal to your estate planning wishes. If the documents are not signed and witnessed properly, then they are not valid at all.
Let me say that again—if the documents are not signed and witnessed properly, then they are not valid at all. They are, in fact, worthless.
A few years ago, I was introduced to a couple who created their own Wills using a popular computer program. After taking a quick look at them and immediately finding several large errors, I got to the signing page and told them that their documents were invalid because they were not executed properly.
After a few moments of protest that they did sign the documents, I explained that in North Carolina at least two independent witnesses had to sign the Wills testifying that they did see them sign the Will personally in order for the Will to be properly executed. The married couple, who incidentally were both PhDs, had signed each other’s Wills as a witness and left the other space blank. Under the state definition of an “independent” witness, a spouse clearly did not qualify.
The husband then sighed and said, “Well, I guess what we intended doesn’t matter.” The fact is that, under these conditions, their intent did not matter at all. Probate court judges do not care what a person may have intended if they had bothered to put their wishes in writing according to state law. The fact is that the person who was doing the “intending” is deceased, and people can do a lot of speculating about what the deceased person may have wanted. However, the probate courts would be much more of a mess than they already are if they stopped everything to determine intent without a valid Will. The way probate courts look at these situations is to see if the Will is validly executed—if it is, then they will determine intent based on the writing in the Will, and if it is not validly executed, then property will be distributed according to who the state statutes say should inherit.
Getting exactly what you want
Even if the Will is validly executed, it may not be exactly what the person wanted. In the years I have been practicing law, I am often approached by other attorneys and advisors about problems about a Will not being clear. Invariably, the issue has been raised in court, and large amounts of legal fees are being spent by all parties to resolve the issue through litigation. And in the end, it is likely that all of those large legal fees for all parties will be paid from the estate.
In every case I was consulted on, it was a person trying to save a few dollars by doing their own Will that caused the confusion.
If you want your partner to have access to all of your accounts during their lifetime and then have the accounts go to all of your nieces and nephews except one who has drug issues, then that is exactly what you should have in your estate plan. If you want to give everything outright to your partner, and then when both partners have passed on fifty percent goes to a charity and the other fifty percent is divided among all siblings, then that is what you should have in your estate plan. Making this clear is best done by an experienced estate planning attorney to avoid your case ending up like the ones I’ve discussed with other attorneys.
Domestic partners who are thinking of estate planning clearly care about each other, and it is important to make sure that it is handled the correct way. Saving a few dollars by trying to do-it-yourself may result in huge legal fees after one partner passes on… or it may result in the plan being thrown out altogether.
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