Do-it-Yourself Estate Planning can have Serious Consequences
You may be wondering if you need an estate planning attorney with all the do-it-yourself options out there. The American Bar Association Task Force Report on Do-it-Yourself estate planning includes an in-depth examination of whether and in what circumstances a DIY plan can work, and when it is a bad idea and why. The report also provides the reader with some real life examples of the consequences a do-it-yourself estate plan can have. It is not unheard of, but rarely will a DIY plan be an adequate solution to your estate planning needs – a conclusion shared by Consumer Reports magazine. The complaints against DIY document services companies along with poor reviews by real customers is disturbing. Whatever decision you make, your decision should be an informed one and you should understand the potential consequences your decision can have on your loved ones after you are gone. Be aware that online DIY providers offer generic forms that are not always suitable for or effective in your jurisdiction. Also be aware of the fact that even though you have to pay for services, providers of DIY services shield themselves from liability to consumers by utilizing extensive disclaimers effectively putting the burden of the consequences of using their products on the DIY user and their families. While the DIY plans are relatively cheap, there is a reason for that.
What can an Estate Planning Attorney do for me?
So, why should you have an estate planning attorney prepare an estate plan for you? A good estate planning attorney will meet with you in person, learn what your particular family and financial situation is and what your estate planning goals are. They will also take into account your budget and provide you with options for an estate plan that fits you, your goals and your budget. They will provide you with options so you can choose the plan that is best suited for you. A good estate planning attorney will understand the plan being presented to you and be able to explain it plain english. They will go over your estate planning documents with you and explain the purpose and effect of the various parts of each of them. In the end, you will get an estate plan you can be confident in and one that will give you peace of mind, knowing things will be taken care of the way you want them to when you are gone.
Some people only want a Will prepared for them so they can choose who they want to be guardian of their minor children if they die unexpectedly. Some may want only basic estate planning related to investments or property holdings or the care of elderly or disabled dependents. Although your estate planning attorney may recommend additional estate planning for you, the size and extent of your estate plan is ultimately up to you. A properly prepared modest estate plan is always better than having a DIY plan or no plan at all.
There are circumstances where more comprehensive estate planning is desired. A good estate planning attorney will know which tools will best address your specific concerns and accomplish your goals. Perhaps you want estate planning services related to the family business and ways to pass it on to others after your death. Perhaps your estate exceeds the threshold exclusion from estate and gift taxes and you are looking for ways to minimize tax consequences to the heirs of your estate after you’re gone. Perhaps you want your grandchildren to inherit part of your estate without having their inheritance being double taxed with estate taxes and generation skipping transfer taxes. There are many other situations when you will need the counsel and assistance of an estate planning attorney when planning your estate. With larger and more complicated estates it is not uncommon for people to have their accountant or financial advisor involved in the planning process to ensure a coordinated estate plan.
Some estate planning attorneys charge an hourly rate for preparation of an estate plan. Some, some like we do, charge a flat fee per document prepared and for other ancillary services so you know exactly how much your estate plan is going to cost you.
With a Trust based estate plan, your estate plan should include the following documents:
In a will you can choose guardians for your minor children, choose who will manage your estate after your death throughout the probate process and choose who your assets will be distributed to. If you are going to have a trust, you can also distribute assets to the trust to be managed according to the terms of the trust document.
With a revocable living trust, assets are transferred into the trust during your lifetime and upon death are managed and distributed by a trustee pursuant to the terms of the trust documents. Assets already in the trust avoid probate and related probate fees.
Powers of Attorney for Health Care and Financial Affairs;
With a power of attorney for health care you choose an agent to make health care and related decisions for you consistent with your stated wishes when you are incapacitated or otherwise unable to participate in the decision making process.
With a power of attorney for financial affairs you choose an agent to manage your property and finances pursuant to the terms of the power of attorney when you are incapacitated or otherwise unable to participate in the management of your own financial affairs.
With an advance health care directive you can specify the extent of life sustaining treatment you want rendered to you in the event you are in an irreversible coma or end of life situation rather than leaving the decision up to family members and physicians.
HIPAA Authorizations give permission to your agent to obtain your medical records in the event you are unable to do so.
Your Estate Planning Attorney may make additional recommendations based upon your particular set of circumstances
With the most qualified estate planning attorneys, estate planning will be a major focus of their practice. Their practice will not be a general or “jack-of-all-trades” practice. They will have years of experience, a specialized education in all aspects of estate planning and an in depth knowledge of the various tools that can be utilized to provide you with options to meet your unique estate planning goals.
With larger or more complicated estates there are a number of estate planning tools that can be utilized to help you meet your goals. Here you can find more detailed information on a few of the more common ones:
- Irrevocable Life Insurance Trusts (ILIT)
- Dynasty Trusts
- Qualified Personal Residence Trusts (QPRT)
- Generation Skipping Transfer Tax Trusts
- Special Needs Trusts
- Pet Trusts
- Charitable Trusts
Other things to think about:
If you have property in more than one state, your estate planning documents need to take the other states’ laws into account so that your estate planning documents are valid in the other state and your end-of-life wishes are carried out. As laws and your assets and family situation change, your estate plan should be updated to account for those changes so that your estate planning goals are not frustrated by the lack of updating.
If you are looking for an attorney to assist you with estate planning or estate related matter we are here to help. Contact us today to schedule your complementary consultation.
Specialty Estate and Elder Law Attorney located in Anaheim, serving clients in Orange County and the surrounding areas
Priscilla A. Madrid, founder of Madrid Law Group is an estate and elder law attorney located in Anaheim Hills, who has been serving clients in Anaheim, Placentia, Yorba Linda, Orange, Tustin, Santa Ana and the surrounding Orange County areas and for 25 years. She has a Masters Degree (LLM) in Estate Planning and Elder Law and is a member of the National Association of Elder Law Attorneys and the American Board of Trial Advocates.