Thursday, May 24, 2012

7 Major Errors in Estate Planning* - Part 2 of 7

A recent article in Forbes listed one author’s opinion of the 7 Major Errors in Estate Planning. 

The 7 Major Errors were listed as:
1.       Not Having a Plan
2.       Online or DIY Rather Than Professionals
3.       Failure to Review Beneficiary Designations or Titling of Assets
4.       Failure to Consider the Estate and Gift Tax Consequences of Life Insurance
5.       Maximizing Annual Gifts
6.       Failure to Tax Advantage of the Estate Tax Exemption in 2012
7.       Leaving Assets outright to Adult Children
I have the opportunity to discuss Major Error Number Two.

ONLINE OR DIY RATHER THAN PROFESSIONALS

There is an abundance of advertisements which purport that a person can create their own will or trust through the use of a certain company’s website.  These advertisements have led to the often repeated question I hear during an initial consultation – why should I use your services over an online company?  I have reviewed many of these internet wills and trusts, and many of these internet documents are laughable leading me to believe that an attorney had no hand in the creation of the documents.  While I would readily admit that the other documents I have seen seem to be fine, legally speaking, they often demonstrate a lack of personalization in meeting the client’s goals and objectives.  Recently, I decided to go through a more widely recognized do-it-yourself internet site that allows a person to create his or her own legal documents.  Although my experience was better than I had expected, I was left wanting the site to do things that it did not offer.  This may be why the site uses the disclaimer that “LegalZoom is not a law firm and is not a substitute for an attorney or law firm.”  These internet sites are not meant as attorney substitutes, and I would add that not all attorneys can properly prepare estate planning documents.  While such sites are slightly less expensive than an actual attorney, there is much more to a properly prepared estate plan than the legal document itself.  As Mr. Clarfeld states in his Forbes article, “estate planning documents should represent the culmination of a well thought out financial and estate plan.  Fill-in-the-blanks documents are not a plan and one size definitely does not fit all.” 

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