Ask The Expert: I recently received do-it-yourself Estate Planning software. Will this be enough to protect my estate?

posted by: Alexis Martin Neely Personal Family Lawyer

As a lawyer, it’s difficult for me to tell you that you can create your own legal documents.  If you don’t need me to create legal documents for you, I could end up out of a job!
But, the truth of the matter is that there are some situations in which you can create your own legal documents and it’ll be okay.  If you are in one of those situations, you can use the software given to you.  If not, you should  meet with a lawyer.

If you have less than $50,000 in the bank and don’t own any real estate, you’ll probably be just fine with the do it yourself software to create your own Advance Health Care Directive and Durable Power of Attorney.  Read this article in the Family Wealth Secrets online magazine for more information about the two legal documents every adult needs no matter how much money you have in the bank.

But, if you have more than that, you should really meet with a lawyer and make sure that you’ve got all your ducks in a row, the right way.

The truth of the matter is that oftentimes creating your own legal documents provides a false sense of security and the breach is only discovered when it's too late to do anything about it.
It's kind of like if you built your own house during the summer when the weather was really good and you thought you knew what you were doing, but unknowingly overlooked a key element like putting waterproof felt between the sheeting and the shingles.  

I mean who would even know that was necessary? I would think you'd just put the shingles right on the wood.   
You might not find out right away that you had overlooked this important item, but a couple years later the sheeting would start to rot away and by the third winter you'd have rain and snow in your house and by the time you figured out what you had done wrong, it'd be too late to do anything about it.
It's the same with do it yourself estate planning, really.
It will seem really easy and as if you've done everything you’re supposed to do. And, you'll go through your life thinking you've done a really good thing for your family or your business. But then, a crisis will come, like a lawsuit, hospitalization or even worse, a death. And your family will be scrambling to figure out what to do and quite often, they'll find out they're screwed by something simple, but critical, you overlooked.
Like not titling the ownership of your house properly. Or, not signing the bylaws for your corporation. Or not issuing the share certificates. Or, not signing your Will properly. Or naming guardians who live too far away to be there right away.  Something that seems simple, but is super easy to miss. Even for lawyers.
Sadly enough, it doesn't only happen when you do it yourself; this false sense of security can happen when you work with a lawyer too. In fact, most estate plans in place today are in grave danger of failing. My own father-in-law spent thousands of dollars on an estate plan and we ended up in Court probating his Estate anyway.
In the meantime, if you are going to do it yourself, take this advice:
1. Get whatever you do reviewed by a lawyer.  

It's better to know than to wonder.  Contact a Personal Family Lawyer to review your Do It Yourself Legal Documents (Suze Orman Will & Trust Kit, LegalZoom, Trust on the Web, any of them) and if you use certificate code DIY, they'll waive the $950 existing plan review and consultation fee.
2. Make sure you do the whole job, not just part of it.  

For example, if you incorporate yourself, don't think filing documents with the State alone is the final step - you need corporate operating documents, you need to issue stock or membership interests, you need contracts and board resolutions, meeting minutes and a registered agent. If you don't have all of these things (and more) your personal assets are not protected from your business risks.

If you establish a living trust, make sure to transfer every single asset you own into it.  That includes your house and all your bank accounts.  And, make sure you change the beneficiaries on your life insurance and retirement accounts.
3. If you have kids, make sure you've adequately provided for their care.   

Most do it yourself legal products (and lawyers themselves for that matter) don't adequately plan for the things parents really care about.  For less than $15, my book "Wear Clean Underwear! A Fast, Fun, Friendly - and Essential - Guide to Legal Planning for Busy Parents" will guide you to exactly what you need to do and help you fix whatever you may have done wrong.
Doing something is better than nothing, but doing something wrong and thinking everything has been taken care of is the worst of all.

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