Sunday, January 12, 2020

Do-It-Yourself Wills - The Pros and Cons

A shocking 60 percent of American adults do not have a will.  This includes both young parents who have failed to choose a guardian for their children in the event of their death, as well as very elderly people who want to leave their assets to their loved ones, but have never bothered to put their wishes in writing. In fact, even for those over the age of 55, approximately 45 percent do not have a will.  There is little reason for this, because nearly anyone can quickly and easily make a will which will satisfy the legal requirements in their state. 

Why Do You Need a Will?

Everyone should have a will, even if they have very few assets.  If you die without one, the laws of your state will decide who gets your assets, including the contents of your bank accounts.  Even if you do not own much of value, you still want to be the person who decides who will get your favorite artwork, jewelry, motorcycle, or car, if you die unexpectedly.  Once you have children, a will becomes even more important.  You will want to use it to designate the person who will be their guardian if you die before they become adults.  This is not something to be left to the courts, because you know things about your friends and family that the state does not know.  For example, is one of your siblings more responsible than the others?  Do you have a friend or family member who is more willing and able to care for your children?  You need to make these decisions, not a judge.

You Can Make an Affordable Will Online in Less than an Hour

Some people do not have a will because they are concerned about the expense of meeting with an attorney to have one professionally written.  Other people do not believe that their assets are large enough to warrant spending a lot of money on a will.  Fortunately, you can easily go online and create your own will quickly and cheaply. There are a variety of websites which make it easy for you to create a will, trust, and any other documents you need.  Among the sites you will want to check out are:

freewill.com
legalzoom.com
rocketlawyer.com

You can also order the Quicken WillMaker Plus.  (Ad) It is a software package which contains everything you need and is highly rated.

For those who do not have a computer, you may want to just order blank forms you can fill in, such as the Family Law Legal Planning Kit. (Ad) It has blank forms you can copy and fill-in, as well as laminated instruction sheets.  You can handwrite or type the information directly onto the form. This is perfect for someone who wants to keep it as simple as possible.

At the very least, whichever system you use, you will want to make sure the documents you create include a will, a trust, an advance health care directive, and a power of attorney to cover financial matters in the event you are temporarily or permanently incapacitated.

Your healthcare provider may have already had you complete an advance health care directive, especially if you have been admitted to a hospital, had surgery, or you are undergoing complex treatments, such as chemotherapy for cancer.  An advance health care directive covers issues such as whether or not you want to have your life extended artificially and for what length of time, whether you would want to be on equipment such as a breathing tube if doctors have declared you brain dead, or what organs or tissue, if any, you would be willing to make available for transplant.  My healthcare provider, Kaiser Permanente, holds classes to help people complete their health care directive, and my husband and I found the class was very helpful.  They also provided the necessary witnesses, so we were able to complete the form without undo stress or complications.

Advantage of Do-It-Yourself Wills

The most obvious advantage of a do-it-yourself will is that you can create everything you need at home, privately, with very little fuss.

They are quick.  Nearly all of the documents can be created in less than an hour.  My husband and I used Legal Zoom to do our will and, a few weeks after filling everything out online, we were mailed a beautiful printed copy of the will, trust and other documents for us to sign and have witnessed.

Do-it-yourself wills are affordable. The cost ranges from free to under $200 for everything you need.  This is a bargain compared to the cost of hiring a professional to do the will for you.

Risks of a Do-It-Yourself Wills

Although creating a simple will yourself is very affordable and appealing, there are risks which could result in unexpected estate planning mistakes.

It is important for you to follow the formalities for your state.  For example, in New York the witnesses must sign the document and include their home addresses.  In Louisiana, the wills must be signed in front of a notary public.  If the online site you use does not give you specific information about signing the will in your state, you can find the pertinent laws at:

statelaws.findlaw.com/estate-planning-laws/wills.html

Another potential problem is that, if you have a complicated personal or financial life, you may not be able to deal with all your complex wishes in a simple online will.  For example, if you have an adult child who is mentally or physically handicapped, you may need a special trust set up for their care.  If you are estranged from one of your children and they will not be included in the will, you may need professional assistance to make sure you handle this situation correctly in your state. If you own a farm or business and plan to pass it on to one or more of your children, you may need professional help to make sure the transition goes as smoothly as possible, while paying a minimum of estate taxes on the business or farm.  In other words, any situation which is not a simple split of your assets among your heirs, with a few specific bequests, may require you to get help from an attorney.

If you make a critical error, it may not affect you, but it could certainly create bad feelings, confusion and unnecessary expenses for your family members after you are gone.

According to professional trustee, executor and estate planner, Marguerite C. Lorenz, in an article she wrote titled "The Problems with Do-It-Yourself Online Wills," the biggest risk is that "you don't know what you don't know."  There are laws and probate code which could affect what happens after you die, and you may not fully understand the implications of some of the decisions you made in your will.

One of the things you may not know is that you do not want to put your funeral instructions in your will.  You want to discuss these plans with your relatives while you are alive, put them in writing, and give your instructions to a family member.  If they are written in your will, your instructions may not even be found or read until after you are buried!

You also need to know that your retirement account assets, your life insurance, and your annuities do NOT get passed down through a will.  These assets have beneficiary-designation forms which take precedence over a will.  Make sure you have completed these forms and keep them up-to-date, or your former spouse may end up with your life insurance or 401(k).

Do not forget to ask someone to be your executor before you name them in your will.  The first person you ask may not want that responsibility, which could cause problems after you are gone. 

The goals of a will are to avoid the necessity of having your heirs go to court, and to make your desires clear.  If your will does not achieve these goals, you have missed the mark.

However, even estate planner Marguerite C. Lorenz agrees that whether you hire a professional or use a do-it-yourself online service, everyone should have a will.  Dying without a will is much worse than any difficulties which could arise from having a will which has been completed on a do-it-yourself site. 

Disclosure: This blog may contain affiliate links. If you decide to make a purchase from an Amazon ad, I'll make a small commission at no extra cost to you.

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