We all know how important it is to have a will, and yet 44% of Americans still don't have one. There are a lot of websites out there trying to change these statistics by offering a DIY option.
Unfortunately, most people don't know that going the DIY route isn't any better and can be worse than simply not having a will. It's tempting to save some money up front by going the DIY route.
As attorneys, we use estate planning software to help streamline the document preparation process. However this is very different software and still involves the expertise of years of experience.
Clients should know these major cons to creating their own estate plan.
Risk of Error
The risk of error is high for those who want to DIY their will. In most states, there are strict rules about what creates a valid and enforceable will.
If the will doesn't meet these standards, it will be deemed invalid. Now the estate will be distributed via intestacy laws. It's a big gamble to DIY your will if it could ultimately be for naught.
You need to know what sort of taxes are imposed on your estate. Does your state have an inheritance tax or an estate tax?
If you don't know these laws you could end up costing your loved ones. A lawyer is going to be familiar with the current tax structure and be able to provide solutions for reducing your tax liability.
Even if someone does understand the tax laws, this may be just enough information to cause chaos. It isn't enough to simply understand how the tax laws affect your estate.
Further thought into how the heirs will be affected is required. Many times people want to leave everything to their spouse. This is fine, except that it may mean that they will have to forfeit their inheritance to avoid a hefty tax later on.
Contracts and Fees
If someone isn't familiar with the laws, they may not know everything they are responsible for after that. If these costs aren't factored in then you may not leave your loved ones what you think you are leaving them.
Things like rental contracts is an example of this. Technically, you're still responsible the lease after you pass away. While these leases can be broken, the executor of your will may have to keep paying the rent until the landlord finds a new tenant.
Another example is student loans. While federal loans are forgiven, private ones are not. This could greatly reduce the value of your estate that you can leave to your heirs.
What You Don't Know Will Hurt You
Every state has their own laws when it comes to creating your estate plan and will. These laws vary greatly and can be quirky at times.
For example, in Florida, the testator must sign at the end of the will. Sign anywhere else and you technically aren't complying with the law. This leaves the door open for someone to contest your will.
Then there are laws that have changed over the years. In Vermont, you used to have three witnesses, but now it's only two. Except that if your will was made when the old law was in effect, then it must comply with the three witness standard.
You Don't Get What You Want
DIY wills tend to be a one size fits all approach, which can end up not accomplishing what you want. Having a lawyer prepare a will means that there is another free-thinking party involved.
A lawyer has the experience and insight to provide advice. An online DIY form cannot do this.
Let's assume a client has multiple children but has had a falling out with one of them. He creates his DIY will, but forgot to add some shares of stock he bought many years before. Today that stock is now worth millions.
Unfortunately, his will doesn't include a residuary clause. So now those stocks pass by intestacy because they weren't accounted for in the will. The stocks will be distributed among the children, including the one the client had wanted to disinherit.
There Are Other Options
When someone creates a DIY will, they tend to think in absolutes. So they leave their estate to the intended heirs. Except that this isn't the only option.
Sometimes it would be smarter to create a living trust or testamentary trust. Both of these instruments allow for limits to be placed on the inheritance.
These tools can dictate how the money can be used, such as for school. It can also dictate how the money gets distributed, such as in lump sums when the heir reaches milestone ages.
It's unfortunate but conflict happens when a loved one dies and the estate gets distributed. You can avoid a lot of conflict and challenges to your will by having it done by a professional.
Someone challenging your will is likely to hire a lawyer. The DIY will you created will be no match for an experienced professional. This will lead to a drawn-out process of defending the challenges to your will.
In addition to reducing the opportunity for challenge, having a lawyer means there is a disinterested their party involved. If a loved one does challenge the will, the lawyer you consulted can act as a disinterested third party to attest to your intended wishes.
Estate Planning Software for Your Practice
Show your clients that creating a will isn't simply filling out a form, it's creating a plan for the future of their estate. They need to think beyond the here and now of their estate.
Estate planning software can help you streamline your practice. Using a document system will ensure that the estate planning documents you prepare for your clients are accurate.
Schedule your demo of the next generation of estate planning software.