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The Perils of Online Estate Planning

Troy Werner and his family

Written by Troy Werner

Troy Werner has been an indispensable asset to The Werner Law Firm since joining in 2009, providing exceptional legal service to its clients.

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POSTED ON: June 14, 2021

It’s never been easier to get things done online than today, given that there’s an app for nearly everything. But there are still a few cases where it’s a good idea to forego convenience for the sake of quality. Estate plans are one of these things. While it may be tempting to give online estate […]

It’s never been easier to get things done online than today, given that there’s an app for nearly everything. But there are still a few cases where it’s a good idea to forego convenience for the sake of quality. Estate plans are one of these things. While it may be tempting to give online estate planning a try, especially when it seems like all you would need to get started is a few legal templates and a rough plan, these cheap or free estate planning services can end up costing you thousands of dollars more than if you had gotten professional help, to begin with.

What Should an Estate Plan Look Like?

An estate plan is more than a single document. Most plans entail at least a last will and testament, but the ideal plan is a little more comprehensive. While estate plans aren’t a legal requirement by any means – many Americans die intestate, without a will or other form of estate planning – it can protect your family from unintended consequences following your death or even allow you to determine simple things like who should run the family business.

At the same time, you’re incapacitated, and what medical procedures you would be ready to veto. In general, estate plans can be divided into a few steps:

STEP 1: Naming Guardians for Your Children

If you have minor children or dependents and should both you and the other parent pass away, then you can name your ideal guardianship candidates in your last will and testament. No other estate planning document allows you to do this.

Naming a guardian in a will does not guarantee that they receive guardianship of your child (a court must decide this), but it will weigh heavily into the decision. Under most circumstances, a court will appoint guardianship as per the decedent’s wishes, save for cases where the named guardians have already died or are otherwise incapacitated.

STEP 2: Bequeathment of Assets

There is very little we can take with us into the grave when it comes to material goods. While there are people who have been buried with their cars, for example, most of the things we own must pass onto someone else when we’re dead – especially things like land, homes, and cash. If we name no one after death, then each state’s intestate laws will determine the order in which a person’s belongings will be distributed.

There are minute differences from state to state, but most intestate law divides a decedent’s estate equally among the next of kin and the surviving spouse (or just the next of kin, if no spouse survives). This can have negative implications. You can’t control how your assets are distributed without a will or trust.

You can’t ensure that your life partner, even if unmarried, get the share they deserve. You can’t ensure that the child best suited to the task of keeping the farm in good shape will get the land or that your spendthrift child will receive their inheritance in a way that safeguards them from their own current temperament with money.

STEP 3: Identifying Trusted Executors

Trusts, wills, and other estate planning documents have to be executed. It isn’t enough to write down what you want to happen when you’re gone or sick. A power of attorney document needs an agent. A will needs an executor. A trust needs a trustee. You will need qualified people to carry out the tasks you have planned for them, whether close friends and family or professionals with a fiduciary duty.

STEP 4: Medical Directive, Financial Contingencies, and End-of-Life Care

A lot can happen before we die. Chronic or progressive illnesses or a sudden incapacity can leave you alive but unable to care for yourself or make decisions in your own name. Thankfully, there are legal ways to name exactly who should be authorized to make which decisions for you and under what circumstances.

You can also make decisions before they come to be important through healthcare directives like a living will. These are especially useful for patients with chronic or progressive illnesses, who know that a day may come when they won’t be able to speak for themselves.

STEP 5: Accessibility and Follow Up

Estate plans are of little use when they’re hidden away and inaccessible. And sometimes, an estate plan can backfire horribly when no one is informed of it. Be sure that your trustee, executor, attorney, and other key individuals know where your important documents can be found before and after death.

Note that estate plans are not to be set in stone. Consider reviewing and revising your plan once every few years or as your intentions change.

What’s Wrong With Online Estate Planning?

Not only is a comprehensive estate plan a nesting doll of complicated legal documents, but each one needs to be individualized to your respective needs. You can end up with a plan that might not be considered valid in your state or county, and you are far more likely to make mistakes – ranging from simple misspellings to far more significant errors – which can greatly affect how your plan will be executed. Sometimes, these mistakes can be rectified with lots of time and money. Sometimes, they cannot.

An estate plan is more than just a handful of templates with a few names and items changed. Wills, trusts, financial and medical directives, and power of attorney documents require precise legal language to translate the principal’s intent – and make sure that, when the time comes that you or your family might need these documents, they will accurately reflect your will and ensure that things go according to plan.

The person drafting these documents needs to understand the bigger picture, know how they complement each other, and ultimately understand (and accurately transcribe). There are details and nuances that an online estate planning template or app would not capture.

When Do I Absolutely Need a Professional?

It pays substantially to hire a competent local estate planning professional whenever you need more than a simple will. Setting up an estate plan is more easily said than done. Estate plans exist to put to paper a very concrete idea of what we want to be accomplished before and after we die. There is no room for shortcuts if you want your estate plan to be representative of your wishes.

Avoiding DIY or template-based online estate planning services also means avoiding one of the simplest and greatest pitfalls for any carelessly developed plan: clerical errors. What might seem like a well-meaning mistake in a vague template, or even a misspelling, can cost your family (and your estate) thousands of dollars further down the line.

An estate plan isn’t something you want to wait on until it’s too late. Estate plans become useful the second you have people who depend on you or are precious to you. This includes young parents, newlyweds, and even college students with an inheritance.

When setting up an estate plan, you shouldn’t settle for anything less than the best. If you’re looking to begin organizing your own plan or haven’t reviewed your old plan in some time, we encourage you to consider working with a local estate planning professional.

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