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Those who seek to replace proper professional advice with do-it-yourself online documents in complex fields like estate planning should understand the effects of their actions. The American Bar Association highlights some common pitfalls of DIY estate planning and the many reasons why it's important to retain an experienced attorney to help you with your plan.
The phrase “Do it Yourself” evokes images of a weekend trip to the Home Depot, a bruised thumb, and the feeling of satisfaction that comes from a freshly painted room, a repaired deck or a newly-constructed patio planter. But even the experts at do-it-yourself publications such as This Old House frequently remind us not to delve into projects in the domain of experts such as plumbers, electricians, excavators and the like. The consequences there -- a broken gas main or electrical shocks -- could have disastrous results.
In recent years, do-it-yourself (“DIY”) providers have emerged in many fields ranging from income tax preparation to estate planning. These services purport to provide, at low cost, the ability to generate computer-drafted documents that may bear some of the hallmarks of professionally-prepared documents. While these services provide tools to enable the DIY project, as with the home improvement world, they should be used with caution.
Those who seek to replace proper professional advice with a do-it-yourself online document in complex fields like estate planning should understand the effects of their actions. One should bear in mind that even those with fairly sophisticated skills think twice before venturing beyond their area of expertise. Consider eminent Judge Rifkind's observation on the subject of tax law that “after 50 years of practice, I would no more have the audacity to formulate my own tax return than I would engage in open heart surgery.”[1]
These concerns prompted the American Bar Association Section of Real Property Trust & Estate Law (the “Section”) to designate this Task Force to evaluate the use of DIY methods in estate planning. The Task Force has considered a number of issues, including the reasons why DIY options may be inadequate or incomplete for many individuals. The Task Force is reviewing much of the commentary on DIY estate planning and will publish a more detailed report in the future. This Preliminary Commentary identifies some of the many concerns identified by the Task Force.
The Emergence of Internet-Based DIY Tools
The list of DIY legal providers continues to grow. LegalZoom may be the most widely advertised of all DIY providers. Other providers include Lawdepot.com; LawyerAhead; RocketLawyer; Nolo; Corporate Filing Solutions Made Easy; BusinessRocket.net; We The People; Standard Legal, and others.[2]
DIY providers promote themselves by charging low rates for documents that ordinarily would cost much more if produced by an attorney. For example, LegalZoom charges $69 to prepare a Will. LegalZoom has provided services to over 500,000 clients.[3]As a result, DIY estate planning has gained attention in the national media including The New York Times[4] and Consumer Reports, as well as legal periodicals.[5] Questions have arisen as to whether DIY legal providers are engaged in the unauthorized practice of law. LegalZoom alone has been sued in at least three states (Missouri, North Carolina and Connecticut) for violating those states’ unauthorized practice of law statutes.[6]
As some attorneys have noted, perhaps the greatest danger of preparing one’s estate plan with LegalZoom or other DIY legal providers is that they lull clients into a false sense of security.[7]
Is DIY for You?
Given the recent media attention focused on DIY estate planning, a person might ask himself: “Should I do my own Will?”
In some limited circumstances, it may be appropriate to do so. For example, if a person has modest assets in his name alone, and desires to leave them to his closest surviving relative, it may be appropriate and cost-effective to use an online service. But for individuals with even slightly more complicated circumstances, creating a Will online creates risk -- risk in an area that will have lasting consequences.
Historically, what we now casually describe as a “Will” carried the more somber label “Last Will and Testament.” That label accurately conveys the importance that should be afforded such instruments -- a Will is one of the few human acts that survives death. It carries a legacy that can have lasting financial and emotional consequences on those who matter most -- our loved ones. Mistakes made in the drafting of such an important document can profoundly alter familial relationships, leaving our family members at best confused or disappointed and at worst locked in hostile litigation.
Consider one example. A New Jersey resident opted to purchase -- surely at a nominal cost -- a Will form kit. He carefully hand wrote his intended dispositions into the form document. He did not have it properly witnessed. Undoubtedly believing he had completed his “simple Will” properly, he signed it and then apparently committed suicide. His heirs, however, eventually paid for his efforts. In the ensuing lawsuit (Matter of Will of Feree),[8]a New Jersey trial court struggled to find a way to interpret and give effect to his handwritten additions to the form. Under New Jersey probate law, the language on the pre-printed form was not admissible because the Will was not properly signed by Mr. Feree (most states require a Will to be signed in the presence of two witnesses, a few even require three witnesses). The Court’s effort to salvage Mr. Feree’s work -- and the ensuing trip to the New Jersey appellate court -- almost certainly cost the family tens of thousands of dollars or more. At least Mr. Feree never saw that enormous expenditure -- he passed away believing he had saved money.[9]
Read the full article by the American Bar Association here.
[1] Simon H. Rifkind, Are We Asking Too Much of Our Courts?, 15 Judge's J. 43 (1976).
[2] See Jonathan G. Blattmachr, “Looking Back and Looking Ahead: Preparing Your Practice for the Future: Do Not Get Behind the Change Curve” 45 Heckerling Institute on Estate Planning, 18-1,18-16;18-17.
[3] See Blattmachr, infra. However, there are hidden costs in preparing an estate plan with LegalZoom. The cost of preparing an estate plan for a married couple on Legal Zoom increases once one includes all the documents, for both spouses, which form part of a standard estate plan including Wills, Durable Powers of Attorney, Living Wills and Health Care Proxies (a/k/a Financial Powers of Attorney and Health Care Powers of Attorney). The total cost then is approximately $300.00 for a married couple.
[4] T.S. Bernard, In Using Software to Write a Will, a Lawyer Is Still Helpful, N.Y. Times, September 10, 2010.
[5] Wendy S. Goffe and Rochelle Haller, From Zoom to Doom? Risks of Do-it-Yourself Estate Planning, 38 Estate Planning Magazine 27 (April 2011).
[6] See Blattmachr, infra; and http://inventblog.com/uspto/legalzoom-sued-for-unauthorized-practice-of-law.html.
[8] 369 N.J. Super. 136 (Ch. Div. 2003), aff’d, 369 N.J. Super. 1 (App. Div. 2004).
[9] Many states have left open the chance for probate of such defective documents by enacting statutes that permit probate of a “writing intended as a will.” See, e.g., N.J.S.A.
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