do it yourself estate planning is penny wise and pound foolish

September 10, 2013 - Posted by: admin - In category:

taxes - No Responses

“Do it yourself” estate planning is not a good idea…

We’ve blogged on this subject previously, but it just keeps coming up, including a few times again last week.  Therefore, it’s worth revisiting this topic yet again.

Imagine a scenario where you’re talking to a good friend, while sitting in the park on a sunny day.  The friend tells you about his family, including how proud he is of his son, now a recent college graduate.  Your friend notes how smart and wise his son has always been and tells of how well the son performed in college.  You learn that the son majored in health and even completed a master’s degree in the same subject.  Very impressive indeed.  To your great surprise and horror, your friend next tells you about some heart problems he has been experiencing and that surgery is needed to treat his condition.  When you ask which heart specialist will be performing the surgery, he tells you that his son, the smart and wise one with an advanced degree in health, will be performing the surgery.

Ok, crazy and unrealistic example, right?  Perhaps.  For some reason, when it comes to medicine, we seem to understand the distinction between dentists and heart surgeons, between physical therapists and oncologists.  Further, we know that a recently college graduate, whatever his undergraduate or even advanced degree, without attending medical school, is NOT qualified or legally permitted to practice medicine.  Yet, when we leave the area of medicine and venture into the world of finance, accounting and law, the lines seem to blur and we find that people are generally confused and uneducated as to who is qualified to help them with their particular finance, accounting or legal issue.  Perhaps this confusion leads some to assume that rather than worry about any of the above (financial advisor, accountant or attorney), they will just “do it themselves.”  After all, how difficult can it be to file tax forms, purchase investments and/or write your own estate planning documents?

The answer is that it is not difficult to find a form or website that will help you with “do it yourself” estate planning. And if you’re lucky in that scenario, no problems will arise for you, your spouse or your loved ones after you are gone….if you’re lucky.  The problem, however is that none of us are lucky all of the time and all too often, people’s luck runs out when it comes to their estate planning.  By the way, do you REALLY want to trust your loved ones and your hard-earned property to luck?  Do you really want to go to sleep each night, hoping that those fill-in-the-blank forms you purchased from the internet are actually valid under today’s laws and will remain valid in the years to come?  Most rational people do NOT want to rely on luck for these things.  Rather, most of the people with whom we work feel very strongly that they want to have as much certainty as possible and leave little or nothing to chance.  Those are the people who are our clients and we believe that those people sleep much better at night.

In the end, you generally get what you pay for and it is good to avoid “bargains” with respect to things such as parachutes, heart surgery, fire extinguishers, home builders and estate planning.  Why?  Because the stakes are very high with these things and saving a little money on the front end (i.e. getting a bargain) can sometimes mean paying a very significant amount of money later (or requiring other people to pay additional amounts later). In other words, do it yourself estate planning is penny wise and pound foolish.

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