The Potential Pitfalls Of DIY Estate Planning

Estate planning is a critical step to provide for your family’s future needs. You want to make sure to secure their future, and ensure that your wealth is distributed according to your wishes.

Depending on the complexity of your estate, you may be tempted to give it a shot yourself instead of hiring an experienced estate planning attorney. While it may look attractive on the surface, DIY estate planning comes with some significant risks. Let’s take a deeper look at why having an estate planning professional on your side during the process may actually save you money!

Simple Mistakes Can Be Costly

The DIY estate plan templates that you find online are generally designed to handle very simple estates. They aren’t designed to handle many types of custom circumstances, such as providing for children with special needs, passing along property that yields capital gains, and more. Because of these limitations, DIY templates also fail to incorporate sophisticated estate planning strategies that can save you money.

If your estate falls into any of these categories, which most do, you may miss out on the best ways to pass along wealth efficiently to your heirs. You may even accidentally make selections that negatively affect them.

One Size Does Not Fit All

At first glance, creating a will from an online template may seem attractive. What we’ve found, though, is that the majority of DIY wills and other estate planning documents are not designed with a specific state in mind. 

Something we’ve covered in past posts is how one of the most important things to do when you move to another state is to update your estate plan – a will designed in New York may not hold up in North Carolina. And, almost certainly, there would be specific nuances in North Carolina estate planning that could benefit your family more when taken advantage of.

Estate Laws May Change

Estate planning is not a “one-and-done” type of solution – wills, trusts, and other estate planning documents should evolve with your life as your situation changes. In addition, laws may change over time, leaving your documents outdated.

In both situations, it’s often difficult to adapt to these changes with a DIY service or template. Even if it’s a simple update that needs to be made to your estate planning documents, you may never know that without seeking the advice of an estate planning attorney.

DIY Templates Can Be Too Open-Ended

Many DIY estate planning services tout their forms’ flexibility as a helpful feature. However, that same flexibility may be a “double-edged sword.” For example, some platforms allow you to put anything you want in your will’s special directives box. 

As a result, you could include a clause that revokes, modifies, or contradicts other provisions within your will, if you’re not careful. And believe it or not, these companies don’t have to inform you of your error, since they are not considered to be “legal advisors.”

DIY Services Leave You Facing the Complications of Estate Tax By Yourself

Estate tax laws are in a constant state of flux. It can be challenging for even the most experienced estate planning attorney to keep up with all of the new rules and regulations that come out each year, and even more difficult if you aren’t a lawyer!

Although we can’t predict how estate taxes will change in the future, we often have an idea about changes that are in the works, and how you can structure your estate to protect against these when they happen. In a DIY world, you may leave yourself vulnerable to increased taxes as laws evolve.

In addition, “cookie-cutter” DIY forms will generally not let you create tax-saving entities like trusts. They offer the same estate structure for everyone — both those with less than $100,000 of net worth, and those with more than $50 million in assets. That’s not a good plan if you want to avoid a heavy tax burden on your estate!

DIY Estate Planning Can’t Replace a Good Attorney

As mentioned previously, the companies that offer DIY legal services are not required to give you helpful advice as you go through the process on your own. However, some of these organizations may offer to refer you to an estate planning attorney if you feel that you’re in too deep, and need some professional assistance.

The problem is, the rates that these companies pay to their network attorneys for reviewing estate planning documents is usually quite low. This means that in all likelihood, one of two things will happen:

  • Unless you’re lucky, you may not get a comprehensive review of your will and other estate planning documents.
  • You may be upsold on another service that you may not need to make up for the low initial rate.

In any event, the lawyers affiliated with the DIY company may not have the skills or experience that you need for absolute peace of mind around your estate planning strategy. There really is no substitute for an experienced attorney that works in the estate planning field day in and day out.

Peace of Mind in Estate Planning

Even though DIY estate planning may be a tempting option, you could end up losing a significant amount of money in the future in order to save a few dollars today. On the other hand, an experienced, understanding estate planning attorney can help you to navigate the complexities of the process without losing sight of your ultimate goal: making sure your loved ones are well cared for after your death. 

David Anderson and his team are here to help – contact us today to schedule a consultation for your estate planning needs.