Having a will, or any estate planning document, is deemed one of the most important, and underrated, financial planning documents. However, as Iâ€™ve mentioned on several occasions, a shockingly high number of people still donâ€™t have one.
Many reasons have been established as to why people fail to plan, or fail to even want to plan; a couple of them being: (a) it is difficult to discuss death, and (b) paying for something now and not feeling the benefit of it just doesnâ€™t seem right. Therefore, it is now becoming more and more common for people to look for cheaper options when conducting their estate plan â€“ online.
Now, I am not saying this because Iâ€™m an estate planning attorney, but doing Do-It-Yourself (â€œDIYâ€) wills could be one of the absolute worse things you can do for yourself. Only under the most extreme circumstances would I ever recommend one to obtain a will online. Why? Because there are numerous factors that go into the validation of a will that is never considered. Moreover, there are certain required elements needed in order for the will to even be valid; for example: the wording of the document, formalities on how it should be signed, the witnesses, who the witnesses can/cannot be, forgetting to include guardian/conservators, etc.
Here is an example of a Chief Justice, Warren Burger, who although a lawyer himself, but not an estate planning expert, attempted to do his own DIY will, and ended up costing his estate hundreds of thousands of dollars:
â€œStory: Chief Justice Warren Burger died in 1995 with a $1.8 million estate and a will of 176 words he typed up himself. Thereâ€™s something to be said for brevity, but in this case, his family paid $450,000 in estate taxes, something that could have been easily avoided. And his executors had to pay to go to court to get approval to complete administrative acts, such as selling real estate, that typically a well-drafted will would have allowed without court approval.
Lesson: Even if you know a bit about the law, get an estate pro to write your will.â€
(Forbes, 10 Celebrity Estate Planning Mistakes)
I was recently reading another article in Forbes and came across a story from another lawyer whose clients attempted DIY wills. The results werenâ€™t pretty: (1) One involved an individual who purchased a DIY form and left the area â€œ[insert name here]â€ blank, thus leaving his inheritance to â€œ[insert name hereâ€] instead of to their spouse; (2) Second involved a typo, where the individual put a decimal point where there should have been a comma ($200.000, instead of $200,000), which obviously became a contested issue. Although this situation could be rectified, it would require additional time, additional costs, and additional stress.
Furthermore, there are additional important information that is often overlooked in DIY wills: Many who choose DIY wills are unaware that there are various types of assets that do not pass through a will or living trust. This is often referred to as â€œpassing by operation of law.â€ These assets include, but are not limited to, certain bank accounts, IRAs, 401Ks, and life insurance policies, which can automatically be made payable to the person youâ€™ve named. Therefore, although you may have intended to have assets distributed to one person, a portion of them can be distributed to someone else.
For the reasons I donâ€™t do my own taxes, or cut my own hair, or diagnose my own sickness, people should not do their own wills. There are attorneys out there who can provide much needed information on the best steps to take when establishing your estate plan. Will there be a cost for this service, definitely. But, the cost could be far outweighed by the savings. Remember, DIY wills will not provide any information on how to save on taxes or protect your assets from lawsuits. Some things are just meant to be handled by professionals.
Adil Daudi is an Attorney at Joseph, Kroll & Yagalla, P.C., focusing primarily on Asset Protection for Physicians, Physician Contracts, Estate Planning, Shariah Estate Planning, Health Care Law, Business Litigation, and Corporate Formations. He can be contacted for any questions related to this article or other areas of law at firstname.lastname@example.org or (517) 381-2663.