1. YOU DON'T KNOW WHAT YOU DON'T KNOW.The vast majority of people think their situation is simple. However, important and nuanced information frequently surfaces during discussions with an experienced estate planning attorney that wouldn’t seem important to most people.
For example, a woman in her mid-twenties may be a single parent with a young child and “nothing much” in assets. She assumes her situation is simple. If she prepares her own estate plan, she may not consider the fact that her child’s irresponsible father could control her child’s money if something happened to her, the administrative headaches a small parcel of land in a different state would cause, or the tax consequences of a potential inheritance from her parents.
We don’t know what we don’t know, and any DIY form will not be able to ask questions, dig deeper, and make sure your estate plan accomplishes your goals.
2. DIY FORMS DON'T ASK CRITICAL QUESTIONS ABOUT YOUR RELATIONSHIPS.Regardless of the size of one’s estate, relationships make a significant difference in, and are often a defining characteristic of, one’s legacy. A husband may raise his wife’s children for their entire lives and consider them his own, even though they have no legal relationship to him. An aunt may be very close to her nephews and disconnected from her own children, while assuming that “everyone knows” who she'd want to benefit from her estate. An adult child might quit her job to become a full-time caretaker for her ailing step-father, but, upon his death, discover the step-father’s estranged children are the sole beneficiaries of his estate.
In these situations and many others, a DIY approach can have hurtful, costly, and even unfair consequences. On the other hand, an estate planning attorney who asks thoughtful questions and digs deeper can craft an estate plan that is customized to your situation and needs.
3. POOR PLANNING COSTS MORE – FINANCIALLY AND EMOTIONALLY.The consequences of poor planning are rarely seen until it’s too late. The price tags on many low-cost “estate plans” can be misleading, as they fail to take into account the time, money, and stress of contentious and protracted probate or trust proceedings.
Parents complete a DIY form naming their child as the sole devisee and then are killed in a car crash. The child turns 18 and gets all of his inheritance at one time, only to immediately spend it on a fancy car that gets destroyed. Instead, that money may have been better protected in a trust, and used specifically for college tuition or health care expenses.
In another example, let's say two individuals are engaged to be married and execute DIY wills to make sure all their “paperwork” is in order. They subsequently get married, which revokes their existing estate plans. This is clearly not what they intended, but even a perfectly-drafted DIY form cannot educate these individuals on the legal consequences of their actions.
Lastly, let's pretend a couple has two adult children, one with special needs. They want to be “fair” and decide to leave their estate to their children equally. Upon their deaths, the disabled child receives her inheritance and is disqualified from the public benefits on which she depends. Is that what her parents would have wanted?
Some of these mistakes and misunderstandings cannot be fixed. However, for those that can, the actual cost far outweighs the expense of a customized and thoughtful estate plan.
4. UNDERSTANDING YOUR ESTATE PLAN IS JUST AS IMPORTANT AS HAVING ONE.We may want to check “estate planning” off our life to-do list, but understanding your estate plan is the key. In fact, every person already has an estate plan: Oregon’s laws of intestacy. A DIY form can be worse than Oregon’s default plan because you may unknowingly sabotage your own intent. An estate planner’s job is to educate clients on how our probate and trust systems work.
For example, let's say that after completing a DIY revocable living trust, a client believes his assets will avoid probate after his death. The client is likely to skim past the pages of instructions in legalese that may (or may not) instruct the client to transfer assets into the trust. Upon his death, it is discovered that the trust was never funded and the estate is subject to a separate probate in every state in which the client owned property.
Several years ago, a client put her son’s name on her safe deposit box to ensure he had access to it if she becomes incapacitated. Two years later, she came into my office wondering why the bank would not let her access it, only to discover the contents of her safe deposit were listed as an asset of her son’s bankruptcy proceeding. It's not uncommon for clients to make their heirs beneficiaries or joint owners of significant assets without understanding these actions cause the assets to pass outside the terms of their plan. Often times, these unintended consequences can undermine the client’s expectations, unfairly enrich one or more beneficiaries, and/or leave painful feelings and family disharmony in its wake.
In these examples, having an estate plan is not the same as understanding it. Clients assume their situation is normal because it is normal to them. A good estate planning attorney is an investigator and then an educator, viewing the client’s life with fresh eyes while explaining how his or her situation may be unique. In this way, the estate planning attorney is the guardian of the client’s legacy and assumes the critical role of educating clients so they do not inadvertently sabotage their own intent.
5. ESTATE PLANS ARE NOT THE SAME AS DIY PARTY FAVORS.Each person spends years – decades – building a legacy of relationships, wealth, and charitable causes unique to him or her. The choice to use a low-cost DIY template form to preserve or effectuate their legacy is short-sighted. A lifetime of relationships, family, and wealth are far too valuable to risk on a DIY form and can ultimately cost loved ones more time, money and stress to fix.
IF YOU WOULD LIKE TO LEARN MORE, CALL OUR PORTLAND OFFICE AT 503-227-1515, OUR VANCOUVER OFFICE AT 360-823-0410 OR SCHEDULE A CONSULTATION ONLINE.
Taylor S. Kittell is an Associate and Estate Planning Attorney at Gevurtz Menashe. She is a member of the Oregon and Washington state bars and focuses her practice exclusively on estate planning issues including wills and revocable trusts, estate and gift taxes, probate administration, asset protection planning, and beneficiary and trustee representation.