Common Mistakes with DIY Estate Plans
The internet offers all the information and tools we need at our fingertips to create our own estate plan, right? For most people, this is simply not true. At Dismukes Law, we have personally seen clients create wills using the forms provided by DIY websites. Each time we have reviewed one of these plans, there has been a significant mistake, or the plan has been entirely invalid. Although the wills drafted using the DIY services were better than wills drafted by non-lawyers on their own, these DIY websites are generally inadequate to fully meet the needs of most persons.
While your DIY “estate plan” may initially cost only a few hundred dollars, it may end up being much, much more expensive than an estate plan designed by an experienced estate planning attorney.
Wills are only one part of a comprehensive estate plan that fully protects you and your family. Even if your DIY will meets all your state’s requirements and is legally valid, the will alone is unlikely to be sufficient to address all of your estate planning needs. Furthermore, DIY packages you can buy online that purport to be comprehensive may not include important documents you may be unaware that you need. As a non-lawyer, you have not received legal training and are unlikely to know which documents you need to fully plan for the future. This is not a criticism — an estate planning attorney doesn’t know how to fly a plane or create a delicious crème brûlée without the necessary training and experience.
Without expertise in a particular area, we simply don’t know what we don’t know, and this could lead to unnecessary heartache for you or the family and loved ones you will one day leave behind.
DIY estate plans may not conform to the applicable law. The law that applies to estate planning is determined by each state, and there can be wide variations in the law from state to state. Although the forms you can find on the internet may claim to conform to your state’s law, this may not always be the case. In addition, if you own property in another state or country, the laws in those jurisdictions may differ significantly, and your DIY estate plan may not adequately account for them.
A DIY estate plan could contain inaccurate, incomplete, or contradictory information. For example, if you create a will using an online questionnaire, there is the possibility that you may select the wrong option or leave out important information that could prevent your will from accomplishing your goals. In addition, some online services allow users to insert additional information not addressed by their questionnaire that could contradict other parts of the will.
Real Life Example: We had a client come in with their will that stated, “I leave my home to my daughter, but if she later sells the home, 50% of the proceeds are to be distributed to my son.” Well, this provision would not have been enforceable. Once the daughter inherits the home, it is hers to do as she pleases, and the will has no control over the future proceeds from the sale of the home. Therefore, the son would have never received the 50% equity proceeds that mother intended to leave to son. We had to redo this plan and insert trust provisions in order to accomplish this. Those trust provisions are very detailed and specific due to the trust holding real estate for a long period of time.
Your DIY estate plan may not account for changing life circumstances and different scenarios that could arise. For example, if you create a will in which you leave everything to your two children, what happens if one of those children dies before you? Will that child’s share go entirely to his or her sibling, or will it go to the child’s offspring? What if the child’s offspring is under the age of 18?
Real Life Example: A minor inheriting under a will would require a court-appointed guardianship over those inherited assets that has annual filing requirements and would have ongoing legal fees for the guardian of the minor beneficiary. What if one of your children accumulates a lot of debt? Is it okay with you if the money or property the indebted child inherits is vulnerable to claims of the child’s creditors? What if your will states your daughter will receive the family home as her only inheritance, but it is sold shortly before you die? Will she inherit nothing?
As opposed to a computer program, an experienced estate planning attorney will help you think through the potential changes and contingencies that could have an impact on your estate plan and design a plan that prevents unintended results that could frustrate your estate planning goals.
DIYers frequently make mistakes in executing the plan. Under the law, there are certain requirements that must be met for wills and other estate planning documents to be legally valid. For example, a will in Tennessee requires the signatures of two witnesses. Specifically, Tennessee requires that the will be signed by the will maker in front of the witnesses, and that the witnesses must sign the will in each other’s presence. Further, Tennessee law requires that the two witnesses are disinterested persons, meaning that they cannot stand to inherit under Tennessee law if there is no will, or under the will itself.
Real Life Examples: Twice in one month, we saw clients come in with wills that were improperly witnessed. For one family, one spouse’s in-laws signed as witnesses, which is an example of an interested witness, so the wills were invalid. Thankfully, we caught it in time that they could redo their wills with proper witnesses. For another couple, they were unmarried at the time Partner A died.
Partner A’s will left assets to Partner B. Unfortunately, Partner B was a witness to the signing of the will. This is invalid because Partner B was an interested witness. The entire will was invalid and Partner A’s assets went to Partner A’s family instead of Partner B. If you seek the help of an estate planning attorney, you can rest assured that all of the “i’s” are dotted and the “t’s” are crossed, and that your intentions will not be defeated because of mistakes made during the execution of your documents.
Assets may be left out of your estate plan. Many people do not realize that a trust is frequently a better estate planning tool than a will because it avoids expensive, time-consuming, and public court proceedings (i.e., the probate process) that would otherwise be necessary to transfer your money and property to your heirs after you pass away. Even if you have created a DIY trust, if you do not fund it — that is, transfer title of your money and property into the name of the trust — it will be ineffective, and your loved ones will still have to endure the probate process to finish what you started. Further, if you do initially transfer title of all your assets to the trust, it is likely you will acquire additional property or financial accounts over the years that must go through probate if title is not transferred to the trust.
Regular meetings with an estate planning attorney can help ensure that your plan accomplishes your goals and that your grieving family members are not left with major headaches after you die.
We Can Help
A DIY estate plan can lead to a false sense of security because it may not achieve what you think it does. If your DIY will is not valid, your property and money will go to heirs specified by state law, who may not be the people you would have chosen. An unfunded trust will be ineffective. Banks may not accept a generic power of attorney you found on the internet. Laws affecting your estate plan may change. These are just some of the mistakes or unforeseen issues that could cost your family dearly.
An experienced estate planning attorney is aware of any trends in the law that could dramatically affect your estate plan and has the expertise needed to help you design and create a comprehensive plan.
Call Dismukes Law today so we can help provide you and your family with the peace of mind that comes from knowing that you have an estate plan that accomplishes your goals and will avoid unnecessary attorneys’ fees, headaches, or conflict for your grieving family when you pass away.
