September 13, 2021

BUYER BEWARE: DO-IT-YOURSELF ESTATE PLANNING IS RISKY

LegalZoom is a do-it-yourself (DIY) online platform that provides a cheaper alternative to legal tasks than heading to a law firm. Lured by saving money and the thought that forms governing any legal process are all the same, many clients turn to these automated legal services and relinquish all contact with an attorney.

Seems easy enough, right? But if you’re a layperson filling out these forms, it’s also equally easy to miss a step. That omission could interfere with the proper legal process that’s required at the time a form is called into play. What’s more, in the end, you may have to pony up more money than you originally saved when you were preparing the document.

It’s Personal

When you work with one of our Phelan, Frantz, Ohlig, & Wegbreit attorneys, it’s never just about the service or form you need. We create your plan based upon your unique requirements. Estate planning issues are never cookie cutter. For example, the Power of Attorney for a collegebound youngster serves a far different purpose than the language of a 70-year-old who requires a POA.

In the case of the young adult about to go off to college, the primary concern is that their parents have a HIPAA release. This is the ability to get and share medical information with the health care professionals who are caring for their youngster. Without the proper wording of a POA, protections from the Family Educational Rights and Privacy Act (FERPA) could prevent these important conversations from taking place.

Similarly, a younger client who may have digital assets that run the gamut from social media accounts to financial Bitcoin holdings require specific language put into their POA. That language isn’t going to exist on LegalZoom, but it’s language we’ve crafted because we’ve served clients with situations like this.

Beyond the failure to fully address unique situations, downloaded POA forms often neglect to name a successor to serve as POA. They’ll name one person. And if that appointee is not available to act, the form becomes completely useless. When you retain the services of an estate attorney, you’re not just retaining an attorney to create a document and have you sign it. You’re retaining an estate attorney who has experience in these matters and is able to listen to your needs and story and craft a document most appropriate for you.

Variances State to State

Requirements for documents also differ state-to-state, even in bordering states. In New York, for example, the agent must sign the document. In New Jersey, that is not a requirement. New York requires 2 witnesses; New Jersey only 1. Downloading something from LegalZoom does not necessarily take these variances into account. This issue can become even more complicated if you have more than 1 home in different states.

To make matters even more difficult, laws are not static. They constantly change because of new laws and new statutes. To best advise their clients, lawyers keep up with these changes.

It’s Not Better Late Than Never

It’s not uncommon for clients to seek out an attorney to unravel situations that have arisen when an online document is put to the test…and flunks. One family whose dad was sick was rightly focused on getting their dad the palliative care he needed. Understandably, the entire family was emotionally spent both from worry and from developing a care plan. One of the adult children headed to LegalZoom and downloaded a basic Will. The Will dictated that everything would go to the decedent’s wife. If she died first, everything would go to the couple’s four children. The document also appointed the oldest child as Executor.

As it turned out, the dad lived a lot longer than anybody anticipated. The mom actually ended up dying beforehand which meant that everything was passed on to the four children as the LegalZoom Will dictated. Problem was, there were a couple of important things missing:

  1. The family didn’t have the important “What if” conversation about what would happen if one of the children predeceased the father. One of them—the oldest one, no less—did. This brought up the further question about who would be the new Executor and whether the remaining siblings wanted any assets to go to the deceased sibling’s children. There was considerable disagreement among the siblings.
  2. While the Will did appoint the oldest child to be the Executor, it didn’t include a provision to appoint a secondary Executor if the first was not available to serve. It also did not waive the surety bond requirement. In the case of estate administration, the surety bond protects the beneficiaries and creditors of the estate against improper distribution of assets by the Executor. The bond guarantees that the Executor will distribute the estate’s assets according to the Will or a court judgment. In this particular case, the court required the family to get a bond. The new Executor had creditor issues, so the premium for the surety bond ended up being $6000 a year.

Had this family sought legal counsel when they prepared a Will, they would have spent far less money and encountered less, if any, problem resolving the above issues. If they’d come to our firm, we would have had the conversation with them about the possibility of a child predeceasing the father. We would also have included language waiving the bond requirement. We would waive the bond because our clients are typically appointing their children as executors and these are appointees they trust. They’re not concerned that any nefarious action will take place.

If you do decide to use LegalZoom, know the risks you’re taking. Don’t be lulled into a false sense of security. And remember. Your mistakes will not come to light until you become incapacitated or die. The people who are left to deal with these mistakes are your loved ones, the individuals you set out to protect in the first place.

At Phelan, Frantz, Ohlig, & Wegbreit, LLC, you can be assured we will cover all the bases in helping you develop your estate plan. We use the knowledge we’ve acquired in our years of schooling and practice to counsel you on the best ways to protect and take care of your family.

Call us at 908-232-2244 to make sure you craft an estate plan that will fully preserve and distribute your assets in accordance with your wishes and in the manner your loved ones deserve.

 

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