I have had several potential clients and even friends ask me my opinion about online, do-it-yourself, estate planning documents. In recent years several websites have popped up offering a glamorous opportunity to prepare your will, trust, and/or other estate planning documents, often for a lower-cost than what a competent attorney would charge. The online legal document service can have a strong appeal for the uninitiated and those who don’t realize what they’re getting into.
Most people realize that they have to make a last will and testament and that they would probably benefit from a trust. When clients ask me whether the online documents are legal, that’s actually the wrong question. Yes, it’s legal to type in your information to a one-size fits all, generic form and produce a will or trust document. But chances are, that it won’t do what you want and need it to do. You might save a few dollars up front (or not—some of these websites are as expensive as a lawyer), but leave behind a big, expensive mess for your family after you’re gone.
Unfortunately, whether it’s an online service, or a non-lawyer “paralegal” who is providing you with forms to fill out, they’re still not an attorney. These businesses will often spend millions of dollars on their marketing budget to make people believe that their service is just as good. Or a paralegal may spend their energy in person convincing you that they can do just as good a job with their 20 years experience working for a lawyer. But there’s a big flaw that they are hiding: Because they are not attorneys, they can’t give you legal advice. It’s illegal to do so. These “document preparers” will type your information into a generic form to create a “legal” document for you, but they often don’t know whether it’s the right type of plan for you, whether it makes sense given your situation, whether you need special customized drafting in your plan for your family situation, and whether this will work for your needs and desires. Even if they are knowledgeable about estate planning, these non-lawyers are prohibited from giving legal advice. It’s a crime. It would be like having a non-doctor friend who claims to know a lot about chemistry and medicine giving you a prescription or a prescription drug. It’s not allowed for a reason. Lawyers go through specialized training for several years to learn the skills they need to practice law and then they must take and pass a bar exam to be able to offer legal advice. Even then, there are many attorneys who are not specialists in a certain area of the law but still try to take clients’ money and “help” them with that specialized area.
For example, my law firm specialized in estate planning, elder law, and asset protection. If someone came to me asking for help with a criminal law matter, I would refer it to a lawyer who specialized in criminal law—even though I am an attorney licensed to help a client with any legal issue, including criminal. How much less prepared to help a client is a non-lawyer?
To illustrate the point, here’s a real life story of a young woman who was diagnosed with terminal cancer and prepared her Will “legally” online before passing away. In her Will, she left her assets and her life insurance to her 3 minor children. She named her brother as personal representative. Two important things she didn’t realize are: (1) Her minor children couldn’t own property as minors and had to have a custodian, Conservator, or a Guardian of the Property or the Minor Children control those funds for them; (2) Naming her brother as executor or personal representative is not the same as naming a financial guardian or conservator for her minor children nor is it the same as naming a guardian of the person (or physical custody) of the children. By law, her ex-husband is assumed to be the physical and financial guardian.
Therefore, her brother had to fight her ex-husband in court to try to get control of and have the right to manage the funds for the children until they turned 18. The father had no contact with the children or their mother for years before she passed away. And yet because the mother did not nominate a financial and physical guardian for the children, the father by default has those rights. She could have specified in her Will the right provisions to prevent that outcome from happening, but she did not have the proper advice of an attorney and ended up costing her estate (and ultimately her children) a lot of money to keep her ex-husband out of the picture.
Another big problem is that these simplified, generic forms usually leave plenty of room for ambiguity, which a good attorney will not do. Most lawsuits in estate planning are about ambiguous, unclear meaning in a will or trust document—one beneficiary can interpret the words a totally different way than you intended and because of the fundamentally, ambiguous nature of much of the English language, they have an argument to go to court about. These online services also won’t take into account your personal circumstances. Let’s say you want to protect your inheritance from your child’s future potential divorce, or creditors—and that you want your inheritance to stay in your family line for your grandchildren. A good attorney can help you accomplish that objective, while these online document assistance services will not.
So, what do I say when people ask me if they can use an online document service for their estate planning? I tell them that they can—but it’s probably a waste of money, because once I review what they have, I will likely find half-a-dozen or more things wrong with that plan that they didn’t want it to do, but they didn’t even know they should want it to do. Always see a competent attorney specializing in estate planning to make sure you get the outcome you and your family deserve.
OKURA & ASSOCIATES, 2016
Honolulu Office (808) 593-8885
Hilo Office (808) 935-3344
Ethan R. Okura received his Doctor of Jurisprudence Degree from Columbia University in 2002. He specializes in Estate Planning to protect assets from nursing home costs, probate, estate taxes, and creditors.
This column is for general information only. The facts of your case may change the advice given. Do not rely on the information in this column without consulting an estate planning specialist.