And Is a Do It Yourself Estate Plan Right for Me?
Before getting into whether a do it yourself estate plan is appropriate for your situation, it is important to know exactly what will or “estate plan” is and what it does. In my opinion, the most basic estate plan, whether drafted by the most expensive lawyer in town or put together from the cheapest do it yourself estate planning kit you could find, must include a will and a patient advocate designation. Our estate plans typically include a few other steps to make the management of your affairs less cumbersome in the event of an unforeseen disability and upon your death.
These additional actions include designating an agent or attorney-in-fact to act as your “financial advocate” under a power of attorney when you are unable to do so, protecting your home against creditors and nursing home debts with a trust or “lady-bird” deed, and avoiding Probate Court and minimizing or eliminating estate and gift taxes with trusts, family limited liability companies, and other planning strategies. These other components are beyond the scope of this article, but I will address them in the coming weeks.
Do it Yourself Estate Plan:
What it Must Accomplish
A will is a set of instructions for the Probate Court that is only effective upon your death. During your lifetime, it does not matter whether the will was from a do it yourself estate plan or not, it simply sits in a safe-deposit box or other secure location waiting for you to die. For this reason and the fact that none of us seem to plan on dying any time soon, many people (upwards of 60% of the population) do not even bother putting a will together or may simply download a form off the internet without really understanding what the consequences of certain instructions might be. As noted below, these instructions could make or break the people you leave behind.
The instructions in a will tell the Probate Court who you would like to manage your personal property or real estate and what should be done with it. If you have minor children, your will also would nominate someone to care for them and to manage assets you leave behind for them.
The Probate Court simply follows your instructions unless there is a good reason not to. Sometimes, lawyers make mistakes, intergenerational use of the same names cause confusion, or the language used in the documents was modified by a later statute. When a lawyer is involved, he or she keeps notes that are available to help the court determine the decedent’s true intent. In the case of a do it yourself estate plan, those notes and attorney testimony, which could be invaluable for your heirs, are simply not there, so the court usually has no choice other than to follow the document.
Next, nearly everyone would agree that the other essential estate plan document is the patient advocate designation. Many people also refer to it as a “living will,” as other states use that term to describe this document. Unlike a will, a patient advocate designation actually does something for you while you are alive without court involvement.
As its name implies, you use this part of your estate plan to name a person to act on your behalf as your patient advocate, who will make decisions about your health care, treatment, end-of-life decisions, and ultimately anatomical gifts in the event you are unable to do so. Hospitals, doctors and other health care providers must then honor the decisions that person makes on your behalf, so it is important to choose someone you trust to carry out your wishes.
Patient Advocates must have specific language prescribed by statute to be effective in the state of Michigan. Not all do it yourself wills go so far as including Michigan-specific language and instead rely on model statutes written by the American Bar Association and other organizations. While these are sometimes very close to the actual law in lots of states, the legislature of each state likes to make their laws just a little different. Without involving an experienced estate planning attorney, most people would have no idea whether the the patient advocate designation in their do it yourself estate plan kit meets Michigan’s statutory standards or not.
FREE DO IT YOURSELF WILLS:
WHAT’S THE CATCH?
As noted above, many people have opted to make their wills by following a checklist downloaded from the Internet and completing an online fill-in-the-blanks form. Many of these people do not realize that the state of Michigan offers free statutory wills and patient advocate forms, which are in many cases far better than the paid forms sold by various out-of-state companies. For most people, doing more complex planning than what the free forms offers requires the assistance of an experienced Michigan estate planning attorney.
I think that simply filling in the free forms from the Internet will meet the objectives of many unmarried people living on their own without children or grandchildren. In fact, in most cases, it would be less expensive for these folks to complete the free forms and then pay me to review it with them than it would be to use the paid online software and not receive legal advice from an qualified Michigan wills and trusts lawyer.
DO IT YOURSELF ESTATE PLAN:
RISKS AND DISADVANTAGES
I will start with the obvious disadvantage, which LegalZoom(tm) openly admits: 80% of people filling in blank legal forms do so incorrectly. See the little blue box in the upper left:
Not to worry, right, the little blue box says they are there to help, right? Well, you would think that until you read the little white box with the “Disclaimer.” To summarize their disclaimer: Legal Zoom will tell you how to fill in their forms as long as you know how to fill in their forms. So if you ask, “What does the testamentary trust option do?” They are only able to answer something like, “Well, that puts a testamentary trust in your estate plan.”
LegalZoom is prohibited from questioning your decisions or typographical errors or any other mistake you may make. Even the IRS will validate their return before they accept it. The Minnesota State Bar Association has put together a video of a Minnesota-licensed attorney trying to understand the options available at LegalZoom.
The video gives you an idea of what the process is like, both good and bad. The struggles the attorney has are not uncommon, and not just because LegalZoom tells me 80% of people have the similar problems. I have been on both sides of disputes that erupt with a will or trust that is not clear or violates the law or does not correspond with what the decedent told his or her heirs or beneficiaries. In every case, for a do it yourself estate plan, there are hurt feelings and mistrust and a lot of times costs are exacerbated by ill-advised decisions in a will or trust.
While the convenience and purported savings of the fill-in-the-blank form wills and patient advocate designations can appear to make the process a whole lot less complicated, the same can be said for checking the “I request that the IRS calculate my taxes” box on your annual 1040. I have yet to meet anyone who has taken that chance, however.
The process of Estate Planning is often much more beneficial than the actual documents that are prepared. Based upon my experience with Probate Estates and over a decade of working with survivors of decedents, I will advise you whether you plan is legal, whether it might result in a will contest, whether a different approach might be taken, and, most importantly, whether it will do what you think it will do.
You may bring us a do it yourself estate plan you prepared from the State of Michigan forms or from LegalZoom or some other company, and it might be the perfect fit for your situation. What I add is my experience in carrying out these do it yourself estate plans and can provide assurance that your plan works as you think it does or provide alternatives you may wish to choose to make it work better for you and your family better than any do it yourself estate plan.
The purpose of this post is not to scare you into submission and buy more legal services than you need but to help you make informed choices. I offer free consultations on new matters, and I would be happy to help you make informed choices with your estate plan. Before you make a mistake with a do it yourself estate plan please call now or email us today to schedule an appointment.