PART II: THE HIDDEN RISKS OF USING ONLINE ESTATE PLANNING SERVICES: IS IT WORTH IT?
Common Problems with Online Estate Plans:
- Documents May Not Comply with State Law
Estate planning documents are governed by state law, and each state has its own requirements regarding execution.
Something as simple as having the wrong number of witnesses, using an ineligible witness, or failing to follow your state’s signing requirements can create problems later. Unfortunately, those issues often are not discovered until after someone has died or become incapacitated, when correcting them may no longer be possible.
- Creating a Trust Is Only the First Step
Many online services promote revocable living trusts as a way to avoid probate.
Creating the trust, however, is only the beginning.
For a trust to function as intended, your assets must be coordinated with your overall estate plan. Depending on the asset, that may involve transferring title to the trust, reviewing beneficiary designations, or deciding that an asset should remain outside the trust altogether.
Those decisions are rarely addressed in a meaningful way through an online platform. As a result, people sometimes believe they have avoided probate when, in reality, much of their estate may still pass through it.
- Every Family Has Different Planning Needs
No two families are exactly alike.
One client may have a child with special needs. Another may own a closely held business. Someone else may want to protect an inheritance from a beneficiary’s future divorce, creditors, or poor financial decisions. Others may be concerned about treating children from different marriages fairly.
These are not unusual situations. They are simply examples of why estate planning is personal.
A generic template cannot adapt itself to your family’s circumstances or your long-term goals.
- Small Changes in Language Can Have Big Consequences
Legal documents are interpreted according to the words they contain.
People using online templates sometimes modify language to better reflect what they want, without realizing that even small changes can create uncertainty or unintended consequences.
When a document is unclear, disagreements among family members are more likely. Careful drafting helps reduce the likelihood of disputes by making your intentions as clear as possible.
- The Value of Personalized Advice
People sometimes assume they are paying an estate planning attorney to produce a set of documents.
In my experience, the documents are only part of what clients receive.
The real value often comes from the conversations that take place before the documents are drafted. Those conversations help identify issues that may otherwise go unnoticed, coordinate beneficiary designations with the overall plan, discuss whether a trust is appropriate, and tailor the plan to the client’s specific family, assets, and objectives.
Just as importantly, clients leave with an understanding of what their documents actually do and what they do not do.
That understanding cannot be gained by filling out forms without follow up conversations.
- A Final Thought
Over the years, I have reviewed many estate plans that clients prepared themselves or obtained through online services. Some were perfectly adequate for the individual’s circumstances.
Others contained omissions, inconsistencies, or missed planning opportunities that were not apparent until we sat down and discussed the client’s family, assets, and goals. The issue usually wasn’t that the online forms were poorly drafted. Rather, no questionnaire had asked the questions that mattered most.
Estate planning is not about having the longest documents or the most complicated plan. It is about creating a plan that reflects your wishes, complies with the law, and gives your loved ones clear direction when they need it.
For some people, using an online estate planning service may be enough. For many others, a thoughtful conversation with an experienced estate planning attorney can make all the difference.
In Part I of this series, we looked at why online estate planning services are so popular and why a complete plan requires much more than just filling out standard documents. Click here to read Part I: THE HIDDEN RISKS OF USING ONLINE ESTATE PLANNING SERVICES: IS IT WORTH IT?