DIY Estate Plans
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Many people view estate planning as selling of commodity documents (like wills, trusts, etc.). And if that is all there is to it, then they are right to choose DIY options like the form sites that are available. This article discusses DIY estate planning.
In a tough economy many people wonder if paying an attorney to assist you in estate planning is really worth the money. There are numerous resources that will provide you with fill in the blank forms for a reasonable fee. So why would you pay an attorney to do something you could easily do yourself?
Are there situations where “do it yourself” estate planning is a good idea? Many people rationalize that if they are single with little or no assets than a fill in the form will provide them more security than nothing at all. An interview with general counsel from LegalZoom (a do it yourself legal website) confirms the idea that a “do it yourself” document may be the most practical option for those who cannot afford an attorney. According to a LegalZoom survey, about 3 in 4 married couples with minor children lack a legal document that names a guardian for their children. Many believe that downloading a document is better than not having a plan for their children should something happen to them.
But is something really better than nothing? In some cases a poorly planned estate plan can complicate matters more than they help. Estate planning terms and ever changing laws are why attorneys need to go to school and continually stay up to date. Pitfalls of DIY estate planning include:
1) Filing out the form incorrectly.
2) Granting more power than intended.
3) Misunderstanding estate tax laws.
4) Relying on outdated documents.
5) Failing to cover all estate planning needs.
One of the major pitfalls of fill in the blank estate planning comes from confusion over certain terms. For instance who is the testator and who is the heir. Or what is the difference between an “heir at law” and the designation of “principal heir?” Not to mention people confusing the documents that they need. Did you know that will requirements vary by state? And the state that you execute the will in may not be the state you intend to have the will probated in.
There are also many options when granting a power of attorney to another person on your behalf. When looking on line for forms you can accidentally grant someone power over your finances when all you intended them to have was power over your medical decisions.
Estate tax laws are in place to allow the government to tax certain parts of your estate. Depending on the document or “testamentary vehicle” you can shield certain assets and pass them to beneficiaries with minimal tax consequences. By using the right “testamentary vehicle” you will keep more money in your estate.
Both attorneys and DIY websites agree that one of the most important parts of having an effective estate plan is keeping that plan current. When working with an attorney you have the benefit of another set of eyes and the professional advice of someone who will provide for the renewal of certain documents.
You can take steps to keep costs down when making your estate plans. These steps include having a plan when going to meet your attorney. Having a place to start can reduce the amount of time both you and your attorney spend assessing your needs. However, it is common for attorneys to see areas you may have missed when it comes to delegating assets and providing for powers of attorney. Certain issues like guardianship and financial provisions for your minor child in the event of your death can be very sticky and complicated situations.
You can cut out surprise legal fees by finding an attorney who will sit down and give you a cost estimate after hearing your needs. An attorney can explain the confusing terms and laws, and a good attorney can preserve your estate by executing the proper documents to meet your needs while saving your assets from estate taxes and additional legal fees.
It is important to realize that attempting to execute your own estate plan may result in more costs down the road. From beginning to end, you may spend more of your money to the government and attorneys when using a “do it yourself” document than you would had you hired a reputable attorney in the first place. And the peace of mind that comes with a professionally executed estate planning documents really is priceless.
ABOUT THE AUTHOR: Jeramie J. Fortenberry
Jeramie J. Fortenberry is a tax attorney practicing in the areas of trust, estate, probate, and nonprofit law. His practice involves advising individuals, trustees, and fiduciaries on taxation, estate planning, and probate issues. Jeramie’s estate planning practice includes the preparation of wills, trusts, health care plans, and family limited partnerships. He has also counseled small businesses on business and tax aspects of business structure and drafts business succession plans and buy-sell agreements. Jeramie also represents nonprofit organizations of all sizes, assisting them with obtaining and maintaining exemption, charitable registration, avoiding inurement, joint ventures, and entity structuring.
Copyright Fortenberry Legal
More information about Fortenberry Legal
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
Are there situations where “do it yourself” estate planning is a good idea? Many people rationalize that if they are single with little or no assets than a fill in the form will provide them more security than nothing at all. An interview with general counsel from LegalZoom (a do it yourself legal website) confirms the idea that a “do it yourself” document may be the most practical option for those who cannot afford an attorney. According to a LegalZoom survey, about 3 in 4 married couples with minor children lack a legal document that names a guardian for their children. Many believe that downloading a document is better than not having a plan for their children should something happen to them.
But is something really better than nothing? In some cases a poorly planned estate plan can complicate matters more than they help. Estate planning terms and ever changing laws are why attorneys need to go to school and continually stay up to date. Pitfalls of DIY estate planning include:
1) Filing out the form incorrectly.
2) Granting more power than intended.
3) Misunderstanding estate tax laws.
4) Relying on outdated documents.
5) Failing to cover all estate planning needs.
One of the major pitfalls of fill in the blank estate planning comes from confusion over certain terms. For instance who is the testator and who is the heir. Or what is the difference between an “heir at law” and the designation of “principal heir?” Not to mention people confusing the documents that they need. Did you know that will requirements vary by state? And the state that you execute the will in may not be the state you intend to have the will probated in.
There are also many options when granting a power of attorney to another person on your behalf. When looking on line for forms you can accidentally grant someone power over your finances when all you intended them to have was power over your medical decisions.
Estate tax laws are in place to allow the government to tax certain parts of your estate. Depending on the document or “testamentary vehicle” you can shield certain assets and pass them to beneficiaries with minimal tax consequences. By using the right “testamentary vehicle” you will keep more money in your estate.
Both attorneys and DIY websites agree that one of the most important parts of having an effective estate plan is keeping that plan current. When working with an attorney you have the benefit of another set of eyes and the professional advice of someone who will provide for the renewal of certain documents.
You can take steps to keep costs down when making your estate plans. These steps include having a plan when going to meet your attorney. Having a place to start can reduce the amount of time both you and your attorney spend assessing your needs. However, it is common for attorneys to see areas you may have missed when it comes to delegating assets and providing for powers of attorney. Certain issues like guardianship and financial provisions for your minor child in the event of your death can be very sticky and complicated situations.
You can cut out surprise legal fees by finding an attorney who will sit down and give you a cost estimate after hearing your needs. An attorney can explain the confusing terms and laws, and a good attorney can preserve your estate by executing the proper documents to meet your needs while saving your assets from estate taxes and additional legal fees.
It is important to realize that attempting to execute your own estate plan may result in more costs down the road. From beginning to end, you may spend more of your money to the government and attorneys when using a “do it yourself” document than you would had you hired a reputable attorney in the first place. And the peace of mind that comes with a professionally executed estate planning documents really is priceless.
ABOUT THE AUTHOR: Jeramie J. Fortenberry
Jeramie J. Fortenberry is a tax attorney practicing in the areas of trust, estate, probate, and nonprofit law. His practice involves advising individuals, trustees, and fiduciaries on taxation, estate planning, and probate issues. Jeramie’s estate planning practice includes the preparation of wills, trusts, health care plans, and family limited partnerships. He has also counseled small businesses on business and tax aspects of business structure and drafts business succession plans and buy-sell agreements. Jeramie also represents nonprofit organizations of all sizes, assisting them with obtaining and maintaining exemption, charitable registration, avoiding inurement, joint ventures, and entity structuring.
Copyright Fortenberry Legal
More information about Fortenberry Legal
View all articles published by Fortenberry Legal
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
