How can I Avoid (and Quit Making) #EstatePlanning Mistakes?


This #EstatePlanning move could be a disaster in disguise–This-estate-planning-move-could-be-a-disaster-in-disguise?instance=update1

Tales from the Gypped: Horror Stories about Online Trust Providers

Over the years, I have heard/read of many horror stories, from clients and other attorneys, of people burned by online providers of “estate plans” but I have never bothered keeping track of them, until now–here is one recently posted by an attorney on a listserv:

I have a case where the decedent executed a LegalZoom trust, listed her house on Schedule A and then never executed and recorded a deed transferring the house to the trust. So far so good, file a Heggstad petition, everything should be ok.

Apparently to save money (and because LegalZoom apparently does not advise people of the importance of doing so), however, she she did not execute a pour-over will in connection with the trust. She did, however, execute a will in 1989 which apparently was never revoked leaving her estate to her then-husband (now ex-husband) and a testamentary trust for her then minor child (now an adult and the 100% beneficiary of the trust).

Get an attorney!

LegalZoom Scores Poorly in Consumer Reports Test

LegalZoom scored poorly, along with two other DIY alternatives (Rocket Lawyer and Quicken WillMaker Plus), in a Consumer Reports test of common fact patterns for estate planning (story here).  Even in a relatively simple nuclear family situation, LegalZoom was deemed inadequate.  All three products were deemed inadequate for the blended family situation tested, and LegalZoom in particular was criticized for multiple defects, including several criticisms regarding its “Legal Advantage” program which is supposed to provide some sort of attorney support.  Nor did any of these products fare well in the “single with partner” fact setting tested.

How do they Get Away with This?

I listen to a lot of conservative talk radio and based on the constant advertising by a major online document preparer, a lot of folks go this route in preparing their living trusts.


Is it because lawyers charge huge fees and these online wizzes are cheaper and more efficient at preparing simple trusts?

No, that can’t be the case.

Is it because the online wizzes are better and more efficient at drafting higher-level trusts?

No, that can’t be the case.  Lawyer fees appear to be competitive, while the “fine print” on a major online preparer’s site says documents are prepared “at your specific direction” – oh really?  Even most lawyers cannot draft trusts properly unless they specialize in the area.  Some lawyers do draft trusts without really knowing what it is they do not know, but at least you have a malpractice policy to go after and bar oversight.

Is it because the online wizzes offer things like a “free will”?

No, that can’t be the case.  You cannot pick and choose among documents in an integrated estate plan, at least with basic planning.  A professional should recommend the proper documents and charge a package price.  Otherwise, a family trying to save money may forego a vital component of planning.  For example, here is “fine print” you may find on the site of a lawyer practicing in this area:

Each of the following plans includes all planning conferences and one or more living trusts, pour-over wills, durable powers of attorney, advance health care directives, medical information authorizations, living wills, trust funding instructions, certificates of trust, trust summaries, property agreements, and a record-keeping system.

It’s really not about the documents, it’s about the planning and keeping the plan updated so it always can be relied on.  Anything else is just over-priced word processing from a red light district where the term “professional” fails to connote the sort of commitment you need to protect your family.