Pitfalls of Do-It-Yourself (DIY) Estate Planning

In an age where almost anything can be accomplished online, “do it yourself” estate planning websites have recently increased in popularity. Unfortunately, many people who choose to replace proper professional advice with do-it-yourself (DIY) estate planning disregard the potential consequences of their actions.

What is a “DIY” Estate Plan? Well, in simplest terms, an estate plan is a plan you create for the future in the event you are deceased or become too incapacitated to make critical decisions regarding your finances or healthcare. When you choose the “DIY” route, you utilize an online “do it yourself” document creator and neglect the guidance of an estate planning attorney. Someone who DIYs their own legal documents may:

  1. Handwrite a “will” themselves
  2. Use an online document generator that asks pre-set questions
  3. Download a “fill in the blank” document on the Internet

While online estate planning may seem captivating when considering short-term cost savings, the long-term risks are substantial and may not pay off for everyone. Here are three pitfalls associated with DIY estate plans.

1.    DIY Estate Planning Doesn’t Keep Up With State Law

It’s important to note that estate laws are different in every state. Forms that can be found on the Internet may claim to conform to California’s estate planning laws, but this may not always be the case. Estate laws change all the time and most sites that offer do-it-yourself estate planning don’t take any responsibility for their documents if they fail to work when issues arise.

In comparison, an experienced estate planning law firm takes full responsibility for the documents they draft and will be available to resolve any concerns you may have.

2.    DIY Mistakes Can Have Lasting Consequences for Your Beneficiaries

A beneficiary is a person or entity that you legally designate to receive the benefits from your estate. He or she is a designated recipient of a trust, will, retirement savings, or life insurance policy.

While it can be tempting to go the DIY route to create your estate plan because of the ease of fill-in-the-blank legal forms, a simple mistake can have lasting consequences for your beneficiaries. Without legal help, you risk misinterpreting and incorrectly supplying crucial information to your estate plan. Unfortunately, incorrectly supplied information can be invalidated when issues arise later down the road.

3.    DIY Estate Planning May Not Account For Changes in Life

Life happens, your circumstances may change, and different scenarios might arise that you could not have foreseen when you first created your estate plan. For example, if you wish to pass down your assets to both your 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 or legal partner?

As opposed to a computer program, a knowledgeable estate planning lawyer can help you address the potential changes and contingencies that could have an impact on your estate plan.

Inevitably, a “DIY” estate plan can lead to a false sense of security because it may not achieve what you think it does.   We are often asked to review existing estate plans and are shocked by the number of individuals who have had these critical documents prepared incorrectly by non-attorneys, “document assist” companies or online services. Often these “one-size-fits-all” forms will fail because they:

(i) are missing critical provisions;

(ii) are out of date;

(iii) contain provisions that are unnecessarily complex, especially in light of the dramatic changes to the Federal Estate Tax system;

(iv) have not been properly implemented and/or “funded,” which may lead to Probate; or,

(v) contain provisions that will ultimately lead to conflict and expensive court challenges.

If you are interested in drafting a comprehensive estate plan with guidance and support, it’s important to speak with a skilled legal professional in California.  With over 90 years of combined estate planning experience, the lawyers at Botti & Morison Estate Planning Attorneys, Ltd. are skilled at helping individuals and families establish customized estate plans.

Co-founder attorney, Christopher E. Botti, is also a Board-Certified Specialist in Estate Planning, Trust, and Probate Law.

Botti & Morison Estate Planning Attorneys, Ltd. has offices in Santa Barbara, Westlake Village, Valencia, Ventura, San Luis Obispo, and Bakersfield, California. Call us today at (877) 585-1885 to schedule your free consultation.