The Problem with the One-Size Fits All Approach to Estate Planning

The Problem with the One-Size Fits All Approach to Estate Planning

by: Golsima Hagen

Convenience, efficiency, and affordability are top priorities for many consumers in our fast-paced world. More and more consumers are turning to books, software and on-line programs on “Do-It-Yourself Wills and Revocable Living Trusts” to save time and money. Although such “tools” cost a fraction of what many lawyers charge, more often than not, one-size fits all approach to estate planning equates to tax issues, disputes between family members, and thousands of dollars spent in courtroom battles contesting the estate documents.

Many individuals who use books, software, or on-line programs to set up their estate plan, believe that their estate is “simple.” Even with a “simple” estate, it is easy to overlook issues that an experienced attorney would catch. Here are a few examples:

  • Avoiding probate. Probate is time consuming, public, and expensive. For these reasons, many consumers prefer to avoid the probate process. These consumers turn to Do-It-Yourself programs to create a will. Unfortunately, not all Do-It-Yourself programs alert the consumer that having a will does not avoid probate – in fact, having a will likely requires probate.
  • Scrivener’s error. One client had drafted her own estate documents, including a deed that improperly transferred only half of her interest in the real property to her trust as opposed to her entire interest. Correcting this mistake cost the client unnecessary expenses that could have been avoided had she consulted with an attorney.
  • Including end of life instructions in a will. Many individuals confuse a will with a living will by providing instructions on issues such as life support and tube feeding in their will. The problem with leaving instructions about such matters in your will is that your family will likely not be aware of your end of life wishes until it is too late.
  • Beneficiary designations.  Estate planning involves a lot of moving pieces. One of those pieces is to ensure that the beneficiary designation for certain accounts are coordinated with your estate documents. For example – a client named his wife as the beneficiary of his life insurance. Fast forward several years, the client is now a divorcee and recently engaged. He used a Do-It-Yourself kit, naming his fiancé as the beneficiary of his life insurance in his will. The client assumed that his estate documents would take precedence and his fiancé would receive the proceeds of his life insurance policy. He was wrong. In most cases, the life insurance policy will trump your will.

There are many pitfalls to the Do-It-Yourself estate planning kits. Many consumers spend more time and money correcting their mistakes, or worse, leaving hefty tax consequences and a legal battle for their families. If you need a tooth pulled, you don’t rely on Google to tell you how to pull your own tooth – you rely on the skills and expertise of a dentist. So why would you rely on a Do-It-Yourself kit to plan for something as significant as your estate plan?