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Do-It-Yourself Estate Planning Comes with Some Perils

May 5, 2022 | Estate Planning, Trusts

By Matthew DeGioia, Attorney

In a world where an internet search allows you to gain basic knowledge about anything at the click of a button, many people wonder why they should still pay a lawyer to assist them with estate planning.

After all, why pay for a lawyer when so many DIY estate planning websites and software options can provide you with the documents you need? Here are a few reasons why you should not create your estate planning documents on your own:

1. Laws Change

First, just because you purchase estate planning software does not mean that the legal language it uses is current with what is legally required to distribute your estate properly. Federal and state laws regarding wills, trusts, estates, and taxes can change every year. In fact, there are several changes in these areas of law that are expected to take place over the next four years. The importance of having an experienced estate planning lawyer draft and review your estate planning documents is to have someone up-to-date on changes in the law to ensure that your documents are legally compliant and have the requisite language to accomplish your wishes.

2. A DIY Will is risky

The most common use of DIY (“do it yourself”) estate planning software is for creating Wills. However, there is a chance that the Will you made isn’t valid. Most states have strict laws that require Wills to be signed, witnessed, and even notarized in a specific way. In addition, some states will deem a witness invalid depending on their relationship to the testator or whether or not they will benefit from the Will. You may ask, “Who is going to know?” You’d be surprised. Since Wills typically have to be filed with the Court when an Estate is opened, anyone who has an interest in inheriting the testator’s property may challenge the validity of a Will. Suppose the Court finds that the Will wasn’t correctly executed. In that case, the Court can deem that the testator died intestate and ignore that person’s wishes when distributing the property in the estate. Hiring an experienced estate planning attorney at the outset can help minimize the risk of your Will being challenged.

3. A DIY Will might not be what you want.

Wills and Trusts are effective estate planning tools and can accomplish the same objectives. But some people inadvertently create a Will when they should be creating a Trust. A Trust differs from a Will in that the property it distributes doesn’t go through probate. When the settlor of a trust dies, the Trustee will distribute their property according to the instructions in the Trust document. The property does not become part of public record as it would be if it were to pass through a Will. In addition, while a Will only disposes of property upon the testator’s passing, a Trust can effect the transfer of property immediately. Further, if you own property in multiple states, it may be best to set up a Trust to allow for ease of administration. Otherwise, your Personal Representative would have to file for probate in every state where you own property.

4. DIY Trusts are even riskier than DIY Wills.

DIY Trusts are riskier than DIY Wills because there are more considerations to think about when drafting the trust. Do you want a Trust to help you manage your funds better? If so, who would you trust to manage your funds? What if they are unable to serve? Do you want a Trust to help you become eligible for SSI, Medicaid, or other public benefits programs? Do you want protection from creditors for yourself or your children? Words can make all the difference when accomplishing each of these goals. For example, you might intend to create an irrevocable trust for Medicaid eligibility, but your omission of specific language may cause the trust to function as a revocable trust, disqualifying you from Medicaid eligibility. There are a wide variety of trusts that you can create, which makes DIY trusts dangerous. It is essential to consult with an estate planning lawyer before creating these documents.

5. Not all Powers of Attorney are created alike.

Many people use DIY estate planning software to create Powers of Attorney documents. The language in these documents may look impressive. However, just because a Power of Attorney document gives an agent broad power to act on behalf of a principal, it does not mean that a financial institution must accept the document. Fortunately, the Maryland legislature now requires financial institutions to accept Powers of Attorney documents that contain language that conforms to a specific statutory form.

While it is tempting to do DIY estate planning, you will find that it is not as simple as you think, and it is dangerous to do so.  You might end up with unintended consequences. As we all learn at one point, the easy way isn’t typically the best. If you have any questions, please feel free to contact me so that we can figure out the best way to accomplish your estate planning goals.

Founded in 1998 in downtown Silver Spring, Maryland, Andalman & Flynn has forged a distinguished reputation for legal excellence. The Firm practices family law, estate planning, and probate throughout Maryland and the District of Columbia, and represents individuals seeking disability benefits throughout the country. The Firm focuses on cases that impact the rights of everyone, and are there for clients when responsive legal help is most critical. The Firm has provided legal analysis on national and local television and radio, and their attorneys often testify before legislative bodies and are routinely invited to contribute to prominent legal publications. For more information about Andalman & Flynn, please visit the website at andalmanflynn.com or call 301.563.6685.


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