Estate planning is one of those things that many people know they should do, yet often put off for years, because it feels complicated, expensive, or simply unpleasant to think about. In today’s world, however, there are countless websites offering downloadable Wills, trusts, and other documents that promise a quick and inexpensive solution, which leads many people to wonder whether hiring an attorney is necessary. While these tools may seem appealing at first glance, the unfortunate reality is that “Do-It-Yourself” or DIY estate planning can create serious problems, many of which are not discovered until it is too late to correct them.
DIY Estate Planning FAQ
Q: Why do so many people attempt estate planning on their own?
A: For some individuals, the answer comes down to convenience and cost. Online forms are widely available, they might be able to be completed same-day, and they often appear to cover all the basics. Some people also assume that their estate is simple, especially if they do not consider themselves wealthy, and therefore believe that a standard template will be sufficient to protect their loved ones after they are gone.
Q: What is the biggest danger of using generic estate planning documents?
A: The primary issue is that generic estate planning documents are not designed to capture every person’s individualized circumstances. Every family is different, every financial situation is different, and every state has its own laws governing Wills, trusts, and probate. A document that appears valid on its face may fail to address key issues, or worse, may not comply with New York legal requirements at all.
Q: Can a DIY Will actually be invalidated?
A: Yes, and unfortunately, this happens more often than people might expect. New York law requires that Wills be executed in a very specific way, including strict witnessing requirements, and even a small procedural mistake can result in the Will being challenged or denied probate altogether. When that happens, assets may be distributed according to default state intestacy laws rather than according to the decedent’s wishes, which can completely undermine the purpose of creating the Will in the first place.
Q: Are there tax risks involved with DIY estate planning?
A: There certainly can be, particularly when real estate, retirement accounts, or larger financial assets are involved. Estate and inheritance tax issues are not always obvious, and without proper planning, heirs may end up paying far more than necessary. In some cases, assets that could have been transferred efficiently become tied up in complicated or costly processes. Additionally, retirement accounts can often carry significant income tax liability for your estate and beneficiaries, which can be very expensive if not structured properly.
Q: What happens if beneficiary designations are handled incorrectly?
A: This is an area where mistakes are very common. Accounts such as life insurance policies and retirement funds often pass outside of a Will, yet many people do not realize how important it is to coordinate these beneficiary designations with the rest of their estate plan. Conflicting instructions can create confusion, delays, and in some cases, disputes among family members.
Q: Can DIY estate planning lead to family conflicts?
A: Unfortunately, yes, and these conflicts can sometimes be severe and expensive. When documents are unclear, incomplete, or inconsistent, surviving relatives may disagree about what the decedent intended. Disputes over estates have a way of turning emotional very quickly, especially when grief and financial concerns are involved at the same time.
Q: Are trusts especially risky to prepare without legal guidance?
A: Trusts are powerful tools, but they are also complex, and creating one properly involves more than simply filling out a form. To ultimately be useful, a trust must be funded correctly, assets must be retitled, and trustees must understand their responsibilities. When these steps are overlooked, the trust may provide little or no benefit, despite the effort that went into creating it.
Q: What if assets are accidentally left out of an estate plan?
A: Assets that are not properly accounted for may end up passing through intestate administration, which can delay distribution and increase expenses for the estate. This often defeats one of the main goals people have when they begin estate planning, which is to make things easier for their loved ones during an already difficult time.
Q: Is working with an estate planning attorney really worth it?
A: In many cases, clients find that professional guidance provides peace of mind that cannot be achieved through forms alone. An experienced attorney can ensure not only that documents are executed properly, but can also guide you on appropriate alternatives to consider, and help you anticipate and avoid potential issues. While no one enjoys thinking about one’s incapacity or death, careful planning today can spare your loved ones from unnecessary stress, expense, and uncertainty in the future.
Comprehensive estate planning helps protect you and the people you care about. Contact Lacy Katzen LLP so we can help you plan for the future.
