Lead to Improper Asset Distribution
One of the main goals of an estate plan is to make sure your assets get distributed to the people you want, the way you want. Oftentimes, DIY estate plans do not allow for specific asset titling (the legal form of asset ownership) which can cause problems with the distribution of your assets. The negative consequences are very clear — the person who gets your assets may not be the intended beneficiary compatible with your last wishes. This is especially true after divorces and remarriages, a critical time to update your beneficiary designations.
Provides a False Sense of Security
DIY estate plans often lead to a false sense of security that keeps you from getting your estate plan done properly. This can result in unnecessary costs and administration at your death or in the case of your disability. Your documents may not distribute assets in the manner you intended, or they may not be valid at all. Without proper legal advice, you won’t know whether your DIY estate plan works until it is too late.
Failing to Read the Fine Print
Many people don’t realize that estate planning entails much more than just filling out legal forms. Some documents must be executed (i.e., signed and witnessed or notarized) following stringent legal procedures to be considered legally valid. And, if you read the fine print of most DIY planning websites, you’ll find numerous disclaimers pointing out that their documents are “no substitute” for the advice of a lawyer.
Thinking Will Is All You Need
Many assume that creating a will is enough to handle all of their estate planning needs – but wills are only one part of a robust estate plan. For example, a will does nothing in the event of your incapacity, which could require you to have trusts, a living will and/or a durable financial power of attorney.
The Tax Factor
Although a DIY estate plan may appear fool-proof, taxes can throw a major wrench into your plan. For example, taxes issued after the estate plan owner’s passing can often be unforeseen or be more costly than you had initially accounted for in your estate plan. A lawyer can help you prepare for these kinds of variables to ensure that your beneficiaries are not left to sort out the details on their own.
Fixing Costly Mistakes
Creating your own estate plan is supposed to save you money by avoiding legal fees, right? While you may initially save money by not paying a lawyer, you may run into problems down the road that require you to hire an attorney to fix the mistake (if fixable) from your DIY plan. In the end, this causes greater costs and more time spent working to fix mistakes that could have been avoided with a lawyer’s assistance.
When placed in the hands of a knowledgeable estate planning attorney, you will receive help in every step of the estate planning process. This attorney’s expertise will allow you to have a complete picture of the assets within your estate and provide you with the best plan for dividing up and passing these assets down to your beneficiaries. For estate planning assistance, please contact Daniel Ruttenberg at dhruttenberg@smolenplevy.com or Jason Smolen at jdsmolen@smolenplevy.com.
About the Authors
Jason Smolen
Jason Smolen is a founding principal of SmolenPlevy. Smolen’s knowledge of complex estate and business issues has drawn the attention of ABC News, USA Today, E! Online, Realty Times and the Bank of America Small Business Online Community. Mr. Smolen is a graduate of the City College of the City University of New York and the George Mason University School of Law. Smolen also serves as a board member of a local citizens association and recently co-authored an article titled Why You Should Think About Spousal Limited Access Trusts (SLATS).
Daniel H. Ruttenberg
Daniel H. Ruttenberg, JD, CPA, LLM is a principal with the firm. Mr. Ruttenberg received his Bachelor of Science degree with a double major in Accounting and Finance from the University of Maryland. He earned his Juris Doctor with Honors from George Mason University School of Law and his Master of Laws in Taxation with Distinction from Georgetown University Law Center. Mr. Ruttenberg also served as the Director of the Fairfax Bar Association (FBA) for seven years. During this period, he was also elected president – the youngest in FBA history and served as a member of the Board of Directors for the Fairfax Law Foundation.
