Excellent article from fellow attorney Timothy White on planning for new parents – and frankly why there should be an attorney in the mix to ensure beneficiary designations are made appropriately to avoid cost, trauma and passage of assets to young children before they are ready for the responsibility (among other pitfalls of naming minors as beneficiaries of life insurance and retirement plans).
“[A]Will is one of the few human acts that survives death. It carries a legacy that can have lasting financial and emotional consequences on those who matter most — our loved ones.” – Preliminary commentary from ABA Task Force on Do-It-Yourself Estate Planning
Last week I sent my weekly e-zine to my clients and colleagues on a hot topic in estate planning – prepaid legal services. Today I reviewed a copy of the American Bar Association’s Real Property, Trust and Estate Law Section’s task force on DIY Estate Planning. The report highlights the concerns estate planning professionals have for the risks associated with DIY planning.
While for some folks online and prepackaged software programs can be a simple, cost-effective way to get something in writing that might meet the formal requirements of Surrogate’s Court, the Court in New York where your last will and testament must be approved as valid before its terms can be followed, in many instances the software used lulls consumers into a false sense of security that nothing more is needed.
Here are just a few points to consider:
- Is DIY estate planning appropriate for you? If you have assets in addition to a car and bank account probably not. If you have children, definitely not a good idea and if you have anyone you wish to benefit with special needs DIY will be disastrous as special needs planning is not included in any of the packages I have reviewed for purchase.
- Will your DIY plan work when you’re gone? Remember, your will survives you. The test of it does not come to pass until you are gone. If you use DIY kits there is no recourse against the software provider if your plan does not work; you bought software. You did not hire an attorney. In fact, no attorney reviews your finished will or any other document you create with these products.
- Can your DIY plan be admitted to probate? Here in New York wills created and supervised by an attorney receive the presumption that they are valid unless proven otherwise. DIY wills receive no such benefit. When clients have brought me DIY created wills I have never found one that would pass the most basic requirements of a valid will in New York, NOT ONE in 15 years of practice. Something to keep in mind. If a will is invalid, or worse, if part of it is ambiguous, the court costs to determine your intent will far outweigh the fees of any estate planning you could have done with an attorney. Personally, I hate earning fees in this fashion.
- Why Should You Consider Using an Attorney instead of DIY? The expertise in crafting tailored documents is only one small piece of what estate planning attorneys do for clients. Often clients need help navigating issues of choosing trusted parties to manage the estate, continuing trusts and guardians for children. Years of experience in handling difficult situations comes into play. Attorneys are also known as “counselors at law” and in estate planning the counselor role is key. Tax guidance is crucial for many families. In addition the will only controls probate property and your estate contains probate AND non-probate property. Your plan needs to coordinate all of your estate assets, not just the probate property. And your will only comes into play at your death. Planning should always take into consideration disability. Statistics show that a 35-year old American has a 50% chance of a disability lasting longer than 90 days before age 65. This means that any good plan will include medical and financial advance directives as part of planning (the health care proxy and power of attorney here in New York).