Spoiler Alert: I’m an estate planning attorney. I want you to hire me to advise you on, and draft, your estate plan. So it shouldn’t shock you that I’m going to come down on the side of having an estate planning professional do this instead of doing it yourself. But I’m going to share with you what I think are some objectively good reasons why you may not want to do your estate plan yourself.
I’m not going to lie and tell you that if you use off-the-rack software to draft a will or to create trust documents, it won’t work. The language in most of these products aren’t bad. It doesn’t take a whole lot of magic words to create a valid will or trust, and the people who write these software suites are either lawyers themselves or they have hired lawyers to write the language offered by the products.
But when you hire any attorney to draft your estate plan documents, you’re not hiring them to simply draft documents that are going to be deemed as valid will or trust documents. If that’s all there was to it, there wouldn’t be any need for estate planning attorneys.
What you hire an estate planning attorney for is to give you advice and counsel on what your estate plan should be, and to make that happen. Advice and counsel is very important because you may have a very broad idea as to what you want to have happen with your estate after you die (e.g. “I want it to go my wife and then have it split equally between my kids”), but you may not have thought of other questions that need to be addressed. For example, what happens in the terrible case of one of your kids dying before you do? Where do you want the money to go then? Would it make a difference if the child had children of their own? These are awful things to have to contemplate, but they need to be asked in order to have an effective estate plan. Odds are that without being prompted to do so, you might never want to ask yourself the extremely painful question “Who do I want my child’s share of the state to go to if my child dies before I do?”
It’s also very important to understand what a trust is, and what these terms mean. A competent Estate Planning attorney will explain to you what terms like “Settlor”, “Grantor”, “Trustee” and “Beneficiary” mean, and he or she will make sure that you understand these terms. Software can’t do that. If you’re using a software product to create a trust, and you don’t have a clear understanding of what these terms mean, you might very well make a mistake that has significant consequences years down the road.
Here is an example that I came across recently. A couple used an off-the-rack software package to create their wills and their trust. Products like these tend to use an “interview” format that asks you questions and then drafts the document based on how you answer the questions. When the interview reached the question of whom the couple wanted the trustee to be once both of them had died, the couple told the “interviewer” that they wanted their adult daughter to be the trustee. Good choice. But then the question was posed as to whom the couple wanted as their alternate trustee, should something happen to their adult daughter (e.g., death, incapacity) such that she was not able to serve as trustee. The couple listed their two grandchildren as co-trustees. Putting aside for a moment the problem of having co-trustees, there was a much bigger problem with their selection: The grandchildren, at the time of the drafting, were 8 and 2 years old, respectively.
At first, I thought maybe the couple was just thinking too optimistically. Maybe they figured that by the time both they and their adult daughter had passed, the grandchildren would be productive adults. The more likely explanation, I later realized, was that the couple didn’t understand the difference between a “trustee” and a “beneficiary”. Because they didn’t have an Estate Planning professional there to explain these differences. Even if they did want their grandchildren (when they became adults) to serve as co-trustees, an Estate Planning attorney could have drafted their trust in a way to make that happen without allowing for the possibility that the trust might (unlawfully) call for them to be trustees while they were still minors. (Which would have had the likely effect of causing a court to appoint the public guardian to be the trustee).
This mistake, of course, is easily curable. But the couple had the trust for 12 years before this mistake was discovered.
Of course there are some people who know enough about this area to avoid these kinds of mistakes. You may be even be one of them. But you won’t know for sure until a mistake is discovered. You don’t know what you don’t know.
Even with relatively simple things like a Power of Attorney, the advise and counsel of attorney is very important. There are different types of Power of Attorney. Which one is right for you? It’s possible that none of them are right for you. You might be better off without a Power of Attorney designation. But the software won’t counsel you on that.
The bottom line is that even though a few thousand dollars may be no small chunk of change (my fee for complete estate planning services is $2700.00) it’s small in comparison to what your loved ones will pay if you don’t have a proper estate plan in place. For something this important, it’s good to have a professional estate planner advising you. I would like to be that professional estate planner, but if you’re not convinced of the value that I would bring, I still believe that you would be better off with a professional advising you instead of doing it yourself with off-the-rack software.
ST