Estate planning mistakes can be expensive to fix..

February 26, 2018 - Posted by: admin - In category:

taxes - 1

… — that is, when they can be fixed at all.

This is the introduction to an article that I saw online today from Liz Weston, titled “Should you do your estate plan?”  I agree with the premise of the article.  Sadly, it is all too often the case that estate planning mistakes made by people during life (including the mistake of not doing any estate planning) can be very expensive to correct and sometimes it is impossible to make all of the needed corrections after someone has become disabled or died.

“People think, ‘Oh, I have a simple life,’ but you have to understand (that if) you make a mistake and you have unintended results, you can’t bring the person back to sign a new will,” … (quote from same article)

Ms. Weston cites that fact that according to a 2016 Gallup Poll, only about forty-four percent of Americans have a Will.  In my experience with residents of Utah and Illinois, I think that number is lower than 44%.  If we are counting the number of people who have not met with a qualified estate planning attorney, discussed their options and commissioned a customized plan for their situation, the number would be much higher, without question.

In that same article, Liz Weston points out that there are now internet resources like LegalZoom and RocketLaywer, which permit people to obtain a “less expensive” Will or Trust and that can be a suitable option for some situations.  Even so, people who go that route should understand (by way of “informed consent”) what they are getting, in that case, is a very expensive stack of papers and usually nothing more.  (See quote at the very end of this article.)  In other words, LegalZoom and other websites rightfully tell you (if you read the small print at the bottom of the page) that they are not your attorney and are not offering legal advice of any kind.  Rather, they are simply selling you papers based on a few pieces of information you have provided.  I understand that many people are ok with this reality.  Some folks just want their “papers.”  And if you fall into that camp of just wanting someone to sell you papers, LegalZoom or RocketLawyer may be right for you.  But let’s consider an analogous hypothetical situation.

Imagine I had an option of walking into a pharmacy and requesting that the pharmacist fill a prescription I have written out myself.  I spend a couple of hours on Google; I learn what I deem to be the requisite information about my condition and the drug or drugs which will make me feel better and I both self-diagnose and self-prescribe.  Then, I walk into this imaginary “self-help” pharmacy and request the drugs I have determined to be most appropriate for myself.  You may be thinking, “wait, I know people who order their prescription drugs from Mexico, India, China or Canada doing just about that very thing.” Yep, and so do I.  It is a wise move?  You decide.

In some ways, self-diagnosed and prescribed legal help in general, and estate planning in particular can be even worse than our on-demand pharmacy example above because the legal stuff can be far more impactful and longer-lasting.  In other words, if I take a particular drug, assuming it doesn’t kill me or do permanent harm to my body, the drug will likely wear off in a day or two, and I will be back to normal.  In contrast, estate planning mistakes most often have ripple effects on the ones we care about most, and sometimes such effects are of the high dollar and irreparable kind.  Is that a worst-case horror story? Perhaps.  However, we encounter such significant self-help problems on a regular basis.  Sometimes we can fix at least part of the mistake and the resulting challenges and sometimes we cannot.

One last thought on this not-so-happy subject: if we are merely looking at things from the basis of cost, it will rarely be “cheaper” to do the “do-it-yourself” option over the long-term.  Internet Wills must be probated, and the cost of an “inexpensive” Will plus probate is going to be more than the cost of a trust in almost all instances. Internet Trusts practically always equate to unfunded trusts, which means useless trust, waste of paper.  Here again, we are back to a probate procedure that will cost far more than retaining a qualified estate planning attorney in the beginning.

In my experience, preventative law (i.e., proactive estate planning with a Revocable Living Trust) is always better and almost always less expensive than emergency and clean-up law (i.e., no estate planning or DIY estate planning with internet forms or other papers purchased or “borrowed” from someone else).  

Of course, mine is only one of many different viewpoints.  Even so, I’ve been doing this for several years, and I’ve seen more estate plan problems and successes than most people, FWIW.

One last quote from the Liz Weston article:

One of the most valuable services an estate planning attorney can provide, Galvin says, is the opportunity to discuss your situation with an expert who has seen many estate plans in action and who knows what can go wrong.

“With an online form, you have choices, but what you lack is this consultation of being able to say to someone. ‘Walk me through this. Let me get this comfort level of how this would play out for me really for my family…’” 


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