In the age of do-it-yourself (DIY) projects under the tutelage of YouTube, TikTok and cheap online services, it may be tempting to handle estate planning on your own. Social media is abuzz with cute and clever presentations. Online document preparation services promise simplicity and cost savings. The reality, however, can be far more complex and costly. Here’s why relying on DIY for your estate planning might be a dangerous gamble, illustrated by some big bloopers from the field.
1. The Pencil-and-Eraser Trust
One of the most striking examples of DIY estate planning gone awry involves a person who used a "wills and trusts mill" service. The person filled in the blanks of their trust with a pencil, revising it yearly with an eraser and pencil. This approach led to significant problems when the trust wasn’t funded, updated or maintained properly. Estate planning documents need to be precise and formalized—pencil and eraser don’t cut it.
2. The Misplaced House
Another case involved a person who created a DIY trust but didn’t realize that their house needed to be transferred into the trust. When the person passed away, an ancillary probate in another state was needed, resulting in substantial additional costs. Properly funding your trust is crucial, and missing this step can result in unnecessary legal battles and expenses.
3. The Copy-Paste Disaster
A non-attorney drafter used a copy of another person’s will, changing only names and initial beneficiaries. However, the new will still included provisions for the original grantor’s heirs and a beneficiary who was the original grantor’s son-in-law. This led to confusion and potential legal issues.
4. The Will Without a Trust
One person brought a pour-over will to probate, but no trust had ever been created. The pour-over will was meant to transfer assets into an existing trust upon death. Without the corresponding trust, this document was essentially useless, illustrating how critical it is to have all parts of your estate plan properly prepared and coordinated.
5. The Misunderstood HEMS Trust
A DIY trust set up by a non-attorney document preparer left a 60-year-old daughter confused. The trust was a HEMS (Health, Education, Maintenance, and Support) distribution trust, rather than providing outright gifts. This misalignment between the trust's provisions and the family's needs can lead to unintended financial hardship.
6. The DIY Dynasty Trust
A person’s attempt to create a "dynasty" trust resulted in giving beneficiaries a General Power of Appointment (GPOA) over all trust property. This not only undermined the purpose of a dynasty trust but also introduced significant risks and complexities that could have been avoided with professional guidance.
7. The Realtor Trustee
A real estate agent prepared a five-page revocable living trust and named himself as the successor trustee. While this might seem harmless, it introduces potential conflicts of interest and raises concerns about the trustee’s impartiality and competence.
8. The Witness Signature Will
One decedent used LegalZoom to create a will but mistakenly signed on the witness signature line. This error rendered the will invalid, leading to confusion and legal challenges.
9. The Multiple Trusts
A person created multiple versions of a trust, changing beneficiaries and details over time without properly revoking previous versions. This led to a complex and confusing situation where different banks held accounts under different trust versions, causing administrative headaches.
10. The DIY Special Needs Trust
A criminal defense attorney attempted to create a special needs trust using online resources but ended up with a nonsensical document. This included repeated clauses, wrong names, and no named beneficiaries, demonstrating how critical it is to have a properly drafted special needs trust to ensure compliance with legal requirements and to provide the intended benefits.
11. The Disinheritance Trap in Second Marriages
One particularly distressing scenario involves estate planning in the context of second marriages. A person set up a will where all assets of the first-to-die spouse went directly to the surviving spouse. While this might seem straightforward, it can lead to unintended consequences. For instance, if the surviving spouse subsequently passes away, all assets would go to their heirs, effectively disinheriting the children of the first spouse. This situation often occurs when people use generic or poorly drafted estate planning documents that do not adequately address the complexities of blended families. Without careful planning and professional guidance, the children from the first marriage may end up with nothing, as the assets intended for them have been transferred to the surviving spouse’s family.
12. The House That Wasn’t There
A mother who owned two houses of roughly equal value self-prepared a will specifying that one house was to go to one son and the other to the other son. She then sold one of the houses. By the time she died, she had spent the money she received from the sale of the first house. Upon her death, one son got a house and the other got nothing. This scenario underscores the importance of regularly updating your estate planning documents to reflect changes in your assets and ensure that your wishes are clearly and accurately documented.
Conclusion
The examples above illustrate that DIY estate planning can lead to a host of problems, from legal inefficiencies to costly mistakes. Beyond the technical errors and procedural oversights, DIY estate planning often misses the most crucial element of estate planning: legal advice. Professional trust estate planning attorneys bring invaluable expertise, ensuring that documents not only meet legal requirements but also align perfectly with your intent. They help navigate the complex web of laws and personal circumstances to create a plan that truly reflects your wishes. Investing in professional legal guidance from a trust and estate attorney provides peace of mind, knowing that your estate plan is comprehensive, precise, and legally sound. It’s an investment in the security of your legacy and the well-being of your loved ones, ensuring that your intentions are honored, and your estate is managed as you envisioned. Contact us today!
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