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Do It Yourself (DIY) Estate Planning in California [Why or Why NOT?]

Today’s topic is a big one. We are going to be looking at the idea of “do it yourself DIY estate planning”. And if some of you have been listening already, you may have had a thought that I’m just going to go get my last will or trust document, power of attorney online. And certainly a reasonable thought. However, there’s some reasons why this can be an extremely problematic thing to do and cause a lot of problems. So when we’re going to get into that today, the pitfalls with any kind of, call it D I Y estate planning, do it yourself online. So we know that if you do a Google search for online documents, you’re going to find dozens of different websites and I won’t name them, you can find them.

And these are do it yourself planning services. So we’re not talking about traditional lawyer websites, we’re talking about the ones that say that you can get a document for you. Usually it’s very inexpensive and almost any kind of planning document from the bundle of documents that we talked to two episodes ago and talk about what is a state planning. So if you want the information on that, you could scale back to go back to that episode anyway. So but any kind of document, wills, trust, healthcare directive, power of attorney and other more maybe minor documents like guardianship documents and, and conservatorships in some States. And we talk about some States having guardianships, some States having conservatorships, and this may seem like a great idea at first glance. However, here’s the first issue that comes up when you’re talking about do it yourself state planning.

What it does is it gives a self, it gives a false sense of security. So you know, you, you do a will online. And so I’ll give you guys some real life situations. I mean we’ve had people come into the office and I’ll have a last will that was signed wrongly, so perhaps it’s not notarized for it tended, have two independent witnesses. So, you know, most state laws require, you know, at least one if not two disinterested witnesses and there’s formalities around signing the documents. You gotta have a notary in many States but not others for a will. For example, California, you don’t need a notary. You need two witnesses. And in Florida you can do, you’re gonna have a notary sign as an additional proof on your trust. So some States are more stringent than others and that’s the first thing. People don’t really realize just how to sign the documents.

Okay. Next, I mean, once you do set up some kind of a plan from web-based documents, what will typically happen is that you’ll think you’re fine at that point. So, because people think that they’re covered, even if they did it as kind of a, just an immediate step to take care of some things. What’ll happen is this is such a major area where people procrastinate that a lot of times that becomes their plan. And we’ve had circumstances, you know, people passed away with with to say, well they did on legal zoom and a lot of times you can’t even get it. It made it in the court system. It’s not adequately signed. And that is obviously a major problem because then the wishes of the will can’t be honored. And the intestacy laws are laws dealing with somebody not having a will would kick in at that point.

So it’s a, it’s a problem, you know, when Timmy doesn’t get, you know, the estate all in himself that he has to split it with his siblings because the will was invalid. Siblings might like that. So those kinds of things do come up. So you know, the other issues that, that, you know, people need to consider is that people don’t realize that when you do estate planning, and we’re gonna unpack this a lot in future episodes and just talking about a lot of different things, a lot of different aspects of planning, how a lot we’ll have some different experts on when people don’t understand that this kind of planning involves much more than just filling out forms. So when you fill out the forms, you have to have an understanding of how the legal process works in that area that you’re living. And this is the advantage of having a skilled attorney and even attorneys guys, you know, if you’re looking for an attorney, I mean you really want to find one that focuses on estate planning, wills and trusts, probate and trust administration, elder law and these areas.

Because even attorneys that don’t do it wouldn’t understand how probate would even work. Perhaps they’re doing a will on the side and we have that happen a lot too where clients would come in and they’ve got a really inadequate well from somebody that doesn’t normally practice in it. And of course they probably got it on the cheap, but then it becomes very irrelevant leader. The the low cost and, and honestly it makes you look bad as a parent to have the really have the kids see that you wanted to go online and get a cheap document. And guys, this isn’t just small estates. Sometimes we have people with several million dollars in the estate and they want to go online and get it. It’s just more of the mindset of the person. So the other thing that that people, and that leads into the next idea, and that’s that one size does not fit all.

I mean, if you didn’t have anything, perhaps you can almost get away with you know, will you purchased online all over? If it’s not valid, it’s not going to do you any good. But for larger States, yesterday’s podcast, we were talking about high net worth estates that were either inadequately done and lose the Joe Robby example or Prince Pensa stable. There was no role whatsoever. So you know, those, those kinds of estates, obviously, you know what sideways when there was no, in Prince’s case of no document and Joe Robbie’s case, there was actually a set of documents, they were just not adequate. And, and so, and if you look guys, if you’re looking at any documents like this online, you’re going to see disclaimers all over the website. So you’ll see, you know, these documents are not guaranteed to be correct. Complete up to date, let’s say very important red flag that you need to be aware of because frankly the providers don’t want to be responsible.

How often do you think they’re updating these documents? Alright, so we covered in proper execution, but there, you know, you’ve got to have everybody in the room a lot of times in the state like Florida that’s very formalistic. You got to have everyone in the room. The witnesses need to be there and the notary, everybody all at once. You need to verify capacity and especially if there’s any potential conflict down the road concerning the estate. And then what lawyers typically are looking at that know what they’re doing is preventing any future conflicts down the road. So you can imagine resting all of that responsibility on a poorly drafted, probably inadequately signed document. So, and so we’ve been talking a lot about wills, you know, power of attorneys are another one that you know, people rely on heavily if somebody becomes disabled and needs to have business done on their behalf.

The first person, the first thing that people do is they jump and see where the power of attorney is. If you don’t have a power of attorney, which is a relatively inexpensive document and you’re going to have to get some kind of a court appointed guardianship, which is can rent rent into the tens of thousands of dollars. So these are relatively, all these documents are relatively inexpensive. When you think about having to, you know, come in on the back end and get, get authority from a court, that’s why you do it. So you don’t have to have core to 30. Another thing is that this, all these problems, they’re problems. Even if there isn’t much conflict, there is a conflict. Boy, then you’ve got between family members that say where somebody thinks they’re entitled to more or somebody doesn’t want to serve in a particular role, you know, these kinds of things.

And, and I know in my practice, you know, we certainly try to vet those things throughout the process. And a good estate planner would do that. You know, they, they’ll try to identify areas of potential conflict. You know, way in advance. So a lot of, another huge misnomer is people think that I will is enough, just the will alone. And I often tell people when they look shocked, it’s just that, you know, the world might need the least important of all of the estate planning documents just because you know, I’m a state with one child or something, you know, may go to that child. Anyway. However, there are other documents that are critical. I mean the power of attorney and medical documents create major problems. Don’t get me wrong, I really think that a will a proper will is critical, but it’s not the only document.

So, you know, people want to want to consider that. And we just had somebody come in the other day that said they got a wheel offline and they want to use it. This is a couple. And you know, and so we have to speak to that. And so sometimes one spouse would want to do it very inexpensively and another spouse want to get everything done through an attorney. And so the question is, who wins at that point? Does the family win or does the immediate dollar I guess win. So important stuff guys. With that in mind, you know, the advice of course is don’t do it yourself. I mean these are, these are are disasters waiting to happen. Often times it’s like a, if you want to have some work done in your car and you might be able to get the technical manual and go buy some tools and maybe it’s not as good of an example cause it’s not as cheap, it’s more involved.

But let’s say that you know, you, you, you don’t know that much about cars and you’re, you’re going to try to do that and then chances are you’re going to spend more time trying to figure it out and it, and there’s a high chance that things won’t be right. So that’s the spiel on do it yourself state planning. And as we talked about yesterday and some of the other episodes, state planning refers to this whole bundle of assets that you have and what happens to those if you become disabled or die, who, how do those assets get handled and transferred? And all these kinds of things. And state planning, you know, we call it asset management planning. That might be a better way to put it cause people think that States don’t apply to them sometimes in which, and they certainly do in almost every case, somebody needs some planning. And so that requires advocating for that. Alright, so we’ll hit some more legal issues, estate planning related. We’re going to have some life insurance knowledge on the forefront and we’ll continue to bring in some more stories that kinda illustrate a lot of these important points and the things that we’re talking about. And so I appreciate you joining us. Great to be with you guys and we’ll talk to you in the next step. So.


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