We’ve all heard the horror stories associated with DIY or “form” estate planning documents; as a general rule, anything that can go wrong, will go wrong. Nevertheless, DIY/internet estate planning business is booming. Consumer Reports Money Advisor recently tested several of the electronic estate planning services and found problems with all products tested. The six biggest issues they found were:
- Outdated Information: the products were tested in mid-March, and two referred to federal estate-tax limits that were outdated as of January 1st.
- Insufficient Customization: the products rarely referred in detail to state estate law. So they offered no guidance on how states treat wills that, for instance, fail to leave property to children born after a will is signed.
- Too Little Flexibility: for instance, arbitrary age and time limits are provided for some provisions with no opportunity for adjustment.
- Too Much Flexibility: one program allows you to edit your completed will after the interview. Another lets you put anything you like in the special-directives section. Both features could lead to clauses that contradict other parts of the estate plan and/or are not legally sound.
- Incompleteness: None of the packages created a special-needs trust. Only one package gave information on registered domestic partnerships and included a pet trust option in its main interview. None of them touched on “digital assets,” such as ownership and management of server-stored documents and photos, and none dealt with specifics on compensating executors.
- Tax Issues: None of the products explained how to structure trusts to reduce estate-tax liability or address capital gains issues.
Even with all of these issues, there is a new player in the “form” game: Walmart. Sources say the wills sell for just under $100 and are already available in several Canadian Walmarts. The big box legal service is the brainchild of two Toronto lawyers who have plans to continue expanding throughout our northern neighbor. There is no word yet on when the service will hit the U.S. Trust and estate litigation are already flush with the fruits of DIY planning; one would guess that this new tool will only add to the already robust practice.
Contributed by MH Phoenix Estate Planning Attorney Andrea Claus.
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