In this era of “DIY” online tutorials offering instruction in everything from changing the battery of a key fob to rewiring a house, and online personal services available for everything from banking and investing to personal tax return preparation, the market for DIY online estate planning services has grown considerably. These sites promise that for $69 you can fill in the blanks of an online kit and obtain a Will valid in your state, or for $99 you can have a Will prepared plus access to an attorney for an hour, or for $179 you may purchase an entire estate plan, including a living trust, which you receive in the mail in a beautiful leather binder. The appeal of savings of this kind when compared with thousands of dollars for an estate plan done by an experienced estate planning attorney is understandable.
However, we experienced estate planning attorneys are often called upon to review and re-do such documents obtained online, and even to litigate on behalf of family members affected by inadequate DIY online estate planning. Here are a few common issues we see, followed by several reasons to hire an experienced estate planning lawyer.
Failure to Properly Bequeath Property. Language matters. According to the American Bar Association, “the failure to use words of ‘testamentary intention’ could void the Will, just as the use of ‘precatory’ language (i.e. ‘I would like’) could render the dispositions unenforceable.” Fill-in-the-blank online documents may cause more problems than they solve. When the terms of a Will can be interpreted in more than one way, such ambiguity can lead to legal questions and result in the testator’s intent being defeated. Further, if a named beneficiary dies before the testator, a good estate plan will also include provisions for alternate dispositions, something often not thoroughly taken into account online.
We have reviewed many Wills and Trusts lacking provisions for alternate takers in the event that the first-named beneficiary is deceased at the time of the distribution. The clients assume that the alternate beneficiaries have been included in their documents, but the actual language of the documents either distributes the assets elsewhere or, more frequently, fails to designate an alternate altogether. Specifically, we have on multiple occasions seen documents of a married couple with children and grandchildren who intend that if any of their children are not living, such deceased child’s own children (the clients’ grandchildren) should receive the share of the child who is deceased. When in actuality, the terms of the 100-page document name the deceased child’s siblings as the alternate takers, which is not the intention of the couple. The online estate plan cut out the grandchildren from inheriting.
Similarly, we recently reviewed a Will done via an online service for a man with weeks to live. He intended to name his only brother as the recipient of the bulk of his assets, and a friend as the recipient of his tangible personal property (household and personal effects). However, the Will’s language seemed to reverse the provisions, which along with other ambiguous language meant that under the Will, the brother would receive the tangible personal property, and the friend would likely share the bulk of the assets with the brother. Such ambiguities can trigger the need for court interpretation involving a delay in distribution, attorneys, and thousands of dollars in legal fees.
Failure to Coordinate Probate and Non-Probate Assets. Online DIY estate planning services often fail to adequately explain that a Will does not control all of our property. In fact, for many people, a Will controls only a small fraction of their assets. This is because we own our property in different ways, which must then be legally transferred in different ways. Consider the property you own because it is in your possession, the property you own by contract, and the property you own because your name is on the title or deed. A house and checking account may be titled jointly with rights of survivorship so that it will pass to the survivor upon the death of one owner rather than under the terms of the Will. Such property which is not affected by the terms of the Will is considered “non-probate assets.” Other common, non-probate assets include IRAs, employer retirement accounts, life insurance, and annuities, which all typically pass by beneficiary designation and not under the terms of the Will. The Will only controls “probate assets” – those items not transferred under a contract or beneficiary designation. The failure to coordinate the transfer of these assets at death may result in a very different reality than the one the owner intended, and can lead to family disputes, heartache, and thousands of dollars spent in a legal fight.
Failure to Provide Tax Guidance. With congressional control of the federal estate tax exemption and the current exemption amount (currently around $11 million dollars per person, indexed for inflation) set to sunset at the end of 2025, estate tax planning is increasingly complicated. Some state governments also impose estate taxes while others (i.e., Ohio) do not. Tax planning which maximizes use of estate tax exemptions for a family is a powerful and commonly used tool to avoid the 40% federal estate tax, but must include accurate analysis of the property in the name of each spouse and effective use of beneficiary designations to ensure the desired outcome. Lack of, or improper, analysis can trigger a tax cost of hundreds of thousands (even millions) of dollars, all of which should have been in the pockets of the surviving family members.
REASONS TO HIRE AN EXPERIENCED ESTATE PLANNING ATTORNEY
Your Attorney as a Counselor. There is a reason that a lawyer is also called “counselor.” The value of the estate planning lawyer is in the counsel that he or she offers to each client’s unique situation. Generating documents is the result of the service, but the value is in the interaction between you and your lawyer. The estate planning attorney will meet with you to understand your assets, your family situation, and your intentions. Your lawyer will identify issues, explain detailed options, balance competing desires, and help you come up with the best solutions to take care of your loved ones when you are no longer living. We appreciate our role as a trusted advisor and take pride in working with you to find answers to your questions.
Your Attorney Can Offer Practical Advice. Your estate planning lawyer has practical advice, strategies, and solutions for you. For example, clients often assume that the safest place to keep their Will is in their bank safe deposit box. But after we die, most banks will not allow access to anyone but the Executor, and the Executor cannot be appointed without the Will. Because of this, it often makes sense to leave original documents in the safe custody of the estate planning lawyer who will usually provide this service at no charge. Another example of practical advice with great rewards is for those clients who wish to include charities in their estate planning; your estate planning lawyer can advise you how to do so with the most tax savings for other beneficiaries. Finally, as laws change, such as changes in the estate tax exemption amount and passage of the SECURE Act of 2019 affecting retirement assets, your estate planning lawyer can keep you up to date and answer questions about how new laws affect your planning.
You Are Rarely as Simple as You Think You Are. DIY online estate planning is most effective for a limited number of people. For those in a second marriage, with children from a prior relationship, with unusual assets such as LLC interests, for those whose net worth puts them near the estate tax exemption amount, who have children with autism or special needs, who are concerned about protecting assets for a wayward child or a child with creditor issues or a child in a bad marriage, an experienced estate planner will identify all legal issues and make provisions in your estate plan accordingly.
Alethea Teh Busken is an associate at Kohnen & Patton LLP practicing estate planning and probate law. For more information regarding your estate planning needs, contact her at firstname.lastname@example.org or call (513) 381-0656.