This is an article from the Law Offices of Cheryl David in Greensboro, North Carolina, that we thought others may find helpful. (https://www.cheryldavid.com/)
Many people ask me each year why they should see a local attorney for their estate documents instead of creating online documents. My answer is always the same – each state has different laws, each family has different needs and I’ve seen terrible results from do-it-yourself and online planning
1. Each state has different rules, requirements and legal documents.
Every state in the U.S. has different documents and different rules. Failure to get the correct documents, updates and advice may result in protracted court time, confusion and loss of assets. An experienced attorney in your state knows the specifics of what is required to minimize problems and court disputes. You can take a chance and hope you did things right, but there are no re-dos on bad plans. When you’re gone, you’re gone.
2. There is no one size fits all estate plan.
Does the online form or attorney ask you about your heirs? Is your daughter a spend-thrift? Is your son in bankruptcy? Is one of their spouses going to take advantage of the situation when you die? What if your child divorces after you pass, will his spouse get a portion of the inheritance? Do any of your heirs have special needs? What if your child isn’t alive when you die? Where does the money go? Does it go to a minor child, who holds it? What can they use it for? How long do they control it? What if everyone is gone? What if you become disabled? Will you lose everything or is there a way to protect your house and cash assets? The questions go on forever and there are no re-dos on a bad plan when you die.
3. When you have minor children special trust language and beneficiary designations are required.
Each year I see plans where parents leave money to minor children. Each spouse names their spouse on a life insurance policy, but if their spouse dies first or they’re in an accident together, it’s a disaster. They thought they were okay naming their children as beneficiaries, but that’s not the way it works. They would have been mortified to learn that the children never got to use one penny of the life insurance policy, IRA, 401k while they were children, because no one ever told them that minors can’t inherit directly from such plans until they’re 18. The things that could go wrong with bad planning or no planning often do and you will be none the wiser, because you’re dead. There are no re-dos on a bad plan when you die.
4. When you have minor children and you never answered the questions you weren’t asked, devastating things can happen.
So most people know that when they die, if they have minor children, they need to name a guardian for their children, but they don’t think things out, because they’re talking to an attorney online or filling out forms, without knowing the legal repercussions of their decisions. Should you name your parents? What if they get older and can’t handle things later? What about naming your brother and his wife? Who will the kids go to if there’s a divorce? What if no one wants your little darlings? Where does the money come from to raise them if we can’t access your life insurance, retirement plans or estate assets, because minors can’t inherit? As I said above, the State holds the money and there’s no access until they’re 18. Have you named different levels of people to take over? Is the person controlling the money the best person to raise the kids? What wishes and dreams do you have for your children? Will those ever be known?
When you’re dead you’re dead, little Suzie and little Johnny can’t ask you why they didn’t have access to the life insurance or any of the assets in your estate when they were growing up.
They won’t be able to tell you how they always felt like they were a burden to their guardian and they never got to go to Little League or Vacations, because there just wasn’t enough money. There are no re-dos on a bad plan when you die.
5. Online forums don’t examine your financial situation and help you determine the best plan for you.
There are often many fees when you die including Probate costs, filing fees, notice to creditors and estate tax. Did anyone ever advise you there was a way to avoid the expense of court and fees? No! Online plans don’t go into your financial details or options. What will happen to your retirement plans when you die? Will the kids cash out your IRA and 401k at once, resulting in huge taxes? Is there a way to avoid that? Yes. Is there a way to safeguard your land and assets if you get sick? Yes. Documents had to have special wording to accomplish this result. Once you get a bad diagnosis there are amazing things that can be done to protect the well spouse, kids and your estate. When you don’t get the right advice and you bleed money due to illness, lose your house and leave your spouse and kids destitute, there are no re-dos. It’s too late, it’s all gone.
6. Online trusts usually don’t avoid the one thing they were created to do – They don’t avoid probate.
Wills all go through probate and most people who have trusts go through probate also. Why? Because the online program didn’t help Mary and Bill get all of their assets into the trust name. Their accounts and real estate must all be transferred into the trust name, otherwise, their estate will go through probate. Can mom and dad transfer their own deeds into the trusts? Not likely. You need an attorney for that type of work or things could get really messy.
7. Have you ever heard the saying, “You Get What You Pay For?”
While I understand the attraction of a bargain, there are some things like Brain Surgery, Parachutes and Estate Plans, where getting it done right matters more than getting it done cheap. As I’ve said before, it’s too late to change things when you’re gone. Be careful out there. I love the internet and maybe someday you’ll be able to get a great estate plan where you spend hours with a Board Certified Estate Planner, online, making sure that your plan is perfect and all of your needs are addressed, but that day is not here yet. Don’t be penny-wise and pound foolish.
- Estate Planning is Essential Whether You Are Married or Not - April 25, 2018
- Income Tax Basis in Estate Planning – Part 2 - April 23, 2018
- The Downsizing Generation: How to Handle a Surplus of Stuff When a Loved One Ages - April 18, 2018
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