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An ongoing series of informational entries
Legal Documents In a DIY World
July 30, 2020
We live in an increasingly DIY world. I commonly find myself on YouTube, learning how to reset my dryer or (these days) make homemade disinfectant. But I know, and have occasionally learned the hard way, that you get what you pay for.
Having seen three DIY-style Living Trusts in the last week, I felt it was important to discuss the risks of doing an estate plan without an attorney’s counsel. Over the last decade I’ve come across many low-budget estate plans, which nearly always end up costing more to fix than if they had been done correctly in the first place.
Scenario 1: A LegalZoom trust that wasn’t properly signed. Most document prep companies send you a mountain of paperwork to sift through, sign, and have notarized. In this case, the client signed most of the documents, but without an attorney to walk her through the paperwork missed the trust. Unfortunately now, we have to unwind the title on multiple properties, do a new trust, and even risk the court becoming involved down the road. A $400.00 trust to begin with ended up costing thousands of dollars to correct.
Scenario 2: An online trust that was signed, but not funded. In this scenario, the client properly signed the estate plan documents, but never recorded the deed to his property with the county recorder to transfer the property to the trust. Without guidance, changing title on properties is not an easy feat, and if he hadn’t had us review his estate plan, his home and other assets would have gone to probate if he passed away. In his case, the probate fees would have cost upwards of $12,500.00 – definitely worth the savings of having an estate plan done properly.
Scenario 3: A non-attorney trust company. In this scenario, since the company drafting the documents weren’t attorneys, the estate plan format was just a mess. When the wife became disabled, the bank refused to take the Power of Attorney, making the only option for the husband an expensive and tedious conservatorship. When the husband called the trust company to help, they turned him away. A $400.00 estate plan, again, ends up costing thousands of dollars to correct in court.
When you’re paying an attorney to prepare an estate plan, you’re not just paying for the documents. What you’re truly paying for is expert advice, and the peace of mind that comes along with.
The lesson? Some things we just shouldn’t DIY.