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Myth 5: “I can and should do it myself.”

Reality: Estate planning is not do-it-yourself stuff!

In our society, we accept the notion that certain things should be left to specialists, those with the education and training to handle highly technical matters. We understand that with some of this “complicated” stuff, if mistakes happen, the results can be very serious, painful, or irreparable (meaning you may not get a do-over). Among the list of these highly technical matters are brain surgery, dentistry, nuclear reactors, parachute making—and estate planning.

My colleagues and I have had times when we simply couldn’t fix mistakes made and problems caused by people who decided on “do-it-yourself” estate planning. Sometimes, such self-help actions have resulted in the loss of tens of thousands, sometimes hundreds of thousands of dollars that went to pay taxes and other fees that could have been avoided.

It’s true that at other times we can fix mistakes and damage caused by people who decided to engage in “self-help” estate planning, but often the cost and trouble associated with cleaning up such messes are greater than what proper estate planning would have cost from the start.

Are you required to hire an attorney to do estate planning? You already know the answer to that question; no—you’re free to do your own estate planning, including through various Internet options. In truth, many people take this route, and sometimes it works out just fine—sometimes. However, just because you can do something doesn’t mean it’s wise to do so.

For example, I’m free to drive a car that doesn’t have airbags, and I’m free to choose not to buckle my seat belt.[1] I have the choice to wear or not wear a helmet when I ride my bike or drive a motorcycle. I could drive home today without buckling my seat belt and without having a car with airbags. It’s very likely I could make it home safe and sound. Even so, that would not be a wise thing to do. The odds of an accident are remote, but the result of an automobile accident in which I wasn’t buckled in and didn’t have airbags could be very serious. It’s therefore wise not to take my chances with regard to these things and to follow the safe course of action.

A few months ago, I was contacted about a middle-aged person who had engaged in some “self-help” estate planning several years earlier. This man and his siblings had thought it wise to put the man’s name on the deed of his widowed mother’s home.[2] The widowed mother passed away about fifteen years after the son had been put on the deed, and the son was having his accountant work on the mother’s taxes, including in regard to this home. While this man and his siblings were able to avoid probating his mother’s estate as a result of putting his name on the deed several years earlier, unfortunately, by doing so, this man had created a significant tax issue. While he saved a little money on the front end, he was required to pay tens of thousands of dollars in taxes, not what was intended or desired, of course, and worse, it was also nothing that could be fixed after the fact.

Had this man retained a competent estate planning attorney, the fees charged to make proper arrangements for the widowed mother and her property would have been just a fraction of the taxes that he had to pay later. Even sadder was the fact that his huge tax bill could have been avoided (or reduced by about 95 percent) with proper planning. This was all the result of “do it yourself” planning.

From my experience (and I’m of course biased in my views), do-it-yourself estate planning can be compared to do-it-yourself surgery, dentistry, or parachute making. You can do it, and you might get lucky and have things work out just fine. But if you’re unlucky, you and your family might suffer painful and sometimes tragic results from “do-it-yourself” estate planning.

[1] Utah law does require the wearing of seat belts, and I believe in following the law. Even so, I remain free to choose whether I’m going to do so.

[2] The practice of putting someone’s name on a real estate deed is perhaps the most common “self-help” method (and perhaps one of the most problematic). More about this point later—see Myth 6.