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

Today’s article is considers the idea of web based, do it yourself “DIY” estate planning in California. Some of you reading may have already obtained a web based California last will or California trust, or other essential documents OR you may be considering this approach. Certainly this is a reasonable thought given the ease and cost effectiveness of web based estate planning documents for California and elsewhere. However, there’s some reasons why this can be an extremely problematic thing to do and the cause a lot of potential problems.

So, diving right in, we know that if you do a Google search for online wills and trusts or other documents such as a power of attorney, you’re going to find dozens of different websites offering various services.  And, these are often do it yourself DIY estate planning services.

So, to be clear, I’m not talking about traditional lawyer websites or services, but rather the ones that say that you can get a document on line. Generally, these services are very inexpensive and almost any kind of planning document can be obtained including a California last wills, California trusts, a California, a healthcare directive, power of attorney and even other documents like guardianship documents and, and conservatorships in some States.

As a sidenote, some states have guardianships and some, like California, have conservatorships.

California Do It Yourself “DIY” Web Based Estate Planning Concerns

  1.  A False Sense of Security

Do it yourself DIY estate planning in California can deliver a false sense of security for many reasons.

First and foremost, all of these on line virtual estate planning website in California and around the country, include the massive disclaimer which is that these are “SELF HELP LEGAL DOCUMENTS”.  Some offer attorney support which remains extremely limited in my experience.

To illustrate, I’ll give you some real life situations. We’ve had many people over the years come into the office with important documents, such as a last will, that was signed wrongly, such as it not having been notarized properly or the absence of two “disinterested” independent witnesses.

Most state laws require, you know, at least one if not two disinterested witnesses and there’s formalities around signing the documents. In California, you don’t need a notary, yet you need two witnesses. And in Florida, for example, where I am also licensed, you have a notary sign an affidavit on a last will and also a revocable trust. So some states are more stringent than others and that’s the first thing. Point being, there are complexities and people don’t know to sign the documents and often take shortcuts in the absence of true guidance.

So, unfortunately, people think that they’re covered even if they initially opted for do it yourself DIY estate planning in California just as a first step to take care of some things.

What’ll often happen is this is such a major area where people procrastinate that the settle for the web based approach as their plan. As a result, we’ve had circumstances, where people passed away with with a cheap web based last will and a lot of times you can’t even get it admitted to probate administration in California, because 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 California intestacy laws are laws dealing with somebody not having a will would kick in at that point.

So, it’s a problem, you know, when Timmy doesn’t get the estate that was supposed to be left for him only and has to split it with his siblings, who were disinherited, because the last will was invalid.

These are the kinds of problems that can arise.

2.  Important Planning Issues Can Be Missed Entirely

The next issue that people need to consider in the midst of do it yourself DIY estate planning in California and filling out forms, is that California estate planning, is a process that often involves much more than just forms. When an regular person with limited estate planning knowledge is trying to understand complicated forms and question, it requires at least some understanding of how the legal process works in that area that person is living. The advantage of having a skilled attorney, meaning one who focuses on estate planning, wills and trusts, probate and trust administration, elder law and these areas, is being alerted to these state requirements and posed with questions that need to be asked.

Even if your an attorney, there a pitfalls in this area due to the unique formalities involved. So, even if, say, a personal injury lawyer, opts to do a last a will on the side, the same concerns apply, though perhaps to a slightly lesser degree.

3.  Can Lead to Interfamily Disputes and Other Estate Trauma

No parent would choose to have his/her kids experience needless stress and confusion because mom or dad decided to go online and get a cheap document. Yet this happens often and adult children become painfully aware, that mom or dad decided to go cheap.  And unfortunately, the cheap estate planning fallout doesn’t just occur with 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.

Numerous high net worth estates that were either inadequately done or not done at all, such as the Joe Robby estate (Miami Dolphins owner) or the Estate of Prince, demonstrate the problems discussed in this article.

In Joe Robbie’s case, there was actually a set of documents, they were just not adequate.

Point being, having documents isn’t enough.  California estate planning documents need to be well thought out and expertly prepared.

4.  With No Attorney Oversight, Short Term and Long Term Neglect Is Inevitable

How often do you think people who do online virtual do it yourself estate planning documents update them?  If you guess VERY infrequently, you would be correct.  This relates directly back to point 1 above and that false sense of security.

Circling back to formalities and proper execution of estate planning documents, in California witnesses need to be the “conscious presence” of the personal signing the last will and in other states like Florida the requirements are even more strict because everyone needs to be 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.

In this circumstances, lawyers typically are looking at everything as preventing future issues and conflicts . So you can imagine resting all of that responsibility on a poorly drafted, probably inadequately signed document.  Even worse, is that once this inadequate document is prepared, people can forget all about it for years and years.

5.  Lack of Documents Or Inadequate Documents Can Lead to Financial Fallout in the Short Term

I’ve been talking a lot about wills, and yet powers of attorney are another document that people rely on heavily because if somebody becomes disabled, he or she may need to have business handled on their behalf.  Having a flawed power of attorney can lead to expensive financial problems as follows.

When someone becomes disabled and unable to handle his/her financial affairs, the first thing that people often do is to 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 conservatorship, for which legal and cost costs can range extend into the tens of thousands of dollars.

Even when professionally prepared, all of the above mentioned documents are relatively inexpensive, when you consider the cost of later having to ask for legal authority from a California court.  Even if there isn’t much conflict, court appointments are costly.  If there is a conflict, for example a dispute between family members who all think they’re entitled to act or where somebody doesn’t want to serve in a particular role, all bets are off and family fortunes can be seriously compromised.

In my practice, you know, we always try to “vet” potential conflicts and recognize potential pitfalls, with the help of 15 years of practice experience.  Identifying areas of potential conflict in advance is critical.

6.  Misnomer that the Last Will is Enough

So a lot of, another huge misnomer is people think that just having a last will in California or elsewhere is enough.

I often tell people this and they are sometimes shocked. In truth, the last will may be less important than other estate planning documents depending on the plan.

For example, if someone is not married and has one child or something, then assets may all go to that child and depending on the assets, this can be done even without a last will.

There are other documents that are always critical, as mentioned concerning the power of attorney.  The lack of medical documents or even final disposition documents can create major problems. Don’t get me wrong, a proper last will or a revocable trust is almost always critical in California, but it’s not the only document.

7.  Underestimating the Complexity

I had someone come into the office the other day that said they got a last will online and wanted to use it. And so, we often have to speak to that desire given all of the above. Often the question is best explained with an analogy.

If you want to have some work done in your car, if you’re savvy, you might be able to get the technical manual and you may have some tools.

In today’s high tech world, chances are you’re going to spend more time trying to figure all of this out and it, and there’s a even if you’re very adept, there is a high chance that things won’t be right.

Virtual do it yourself DIY estate planning in California is no different.  A high level of complexity applies when you are seeking to plan for your “bundle of assets”, all with various titles, and rules and limitations, legal and otherwise.  As discussed, various questions apply, and must be carefully considered, such as what happens to that bundle if you become disabled or die, who, how do those assets get handled and transferred?

Estate planning in California can also be called asset management planning. All to often, someone is seeking to protect over a million dollars in assets and yet perceives $5,000 to be hefty cost for doing it right.  Consider that for a moment.

The good news is our caring California estate planning team will soon be offering virtual web based options that are both cost effective and professionally assisted through the power of the web.  So, stay tuned!

To your success,

Steve Gibbs, Esq.