Sometimes we get asked our opinion about do-it-yourself documents, the kind you can buy at an office supply store or online and fill them out yourself. Here’s our answer. They might suit your purpose just fine, but they might not. The problem is, no one will know how well your documents work until it’s too late. Your will, trust, power of attorney and advance medical directive are too important to leave to chance.
If your power of attorney does not give your agent all the powers they need and you have become incapacitated, it’s too late to fix it. Your agent might be forced to go through the hassle and expense of guardianship through the courts.
If your will doesn’t address a very important matter in your estate or you have made something unclear and you’re already dead, it’s too late to fix it. Your executor might have to endure the hassle and expense of going to court to get guidance.
Here are some examples of complexities that an attorney can help you consider. Do you have beneficiaries that require special consideration – such as disabled persons, children 18 and under, or persons with drug or alcohol problems? Who should manage assets for those persons if they become beneficiaries? Under what conditions may distributions be made? Do you want to require that real estate be sold by an executor or trustee, or do you want real estate to pass to the beneficiaries? Do you want to protect assets ahead of time in the event you need nursing home care? Do you want an agent under a power of attorney to be able to make gifts or change beneficiaries on your behalf? Are you a good candidate to establish a trust? Do you want to avoid probate? Do you want to avoid bonding for your Executor? Do you want to have a typical living will – or do you want to be specific about what kind of life-prolonging procedures you would want if you become terminally ill?
Nothing replaces sitting down with a knowledgeable professional and going over what’s important to you, whether it’s how your business affairs or medical decisions are handled by someone else if you become too ill to handle them yourself, or whether it’s how your estate is handled after your death. Is hiring an attorney more expensive than doing the documents yourself? In the moment, yes. In the long run, probably not when you consider the cost of resolving issues that have not been addressed properly. Also we have come across documents more than once that were not signed properly. Maybe the signature is in the wrong place, or maybe a signature or initials are missing, or maybe the document wasn’t notarized or witnessed properly.
Here’s just one example of a do-it-yourself will gone wrong from a case we had long ago. Single father of young child had a term life insurance through work. He designated his sister as the beneficiary of his life insurance. He also did a do-it-yourself will, however, and stated that his term life insurance would go to his young child. Under those circumstances, who got the life insurance? The sister did. It did not matter what the will said. It was a matter of contract with the life insurance company, and the sister was the designated beneficiary. Also the do-it-yourself will did not establish a trust for the young child, requiring the child’s mother to go to court to become the guardian of the child’s other inheritance (which did not include the life insurance). The mother was required to be bonded and to provide yearly accountings regarding the funds. Also, the child’s mother was not truly able to access the funds for her child, as the law basically required to manage the funds until the child turned 18, at which time she had to turn those assets over to him. Single father in all likelihood would not have wanted the child’s mother to be the one to handle his money as the two were divorced. Also unlikely he wanted his child to receive an inheritance at the very young age of 18. All around a bad result.
You work a lifetime to build your estate. Don’t leave something as important as how your affairs are handled during life and after death up to the chance that your do-it-yourself documents do what you want them to do.