Do-It-Yourself Estate Planning: You Get What You Pay For

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The self-help market has exploded in recent years, offering books and software on topics ranging from gardening to healthcare. Among these offerings, you’ll even find proddo-it-yourselfucts claiming to help you draft your own estate planning documents. Some are endorsed by media personalities or so-called “experts” and are marketed as affordable alternatives to hiring an attorney.

While these tools may seem convenient and cost-effective, they often come with serious risks.

The Risks of Do-It-Yourself Estate Planning

1. Technical Flaws
Even if a product appears to be well-made, it might not comply with state-specific laws. For example, the Elder Law and Estate Planning Sections of the North Carolina Bar Association found critical flaws in a popular set of “off-the-shelf” documents. The Bar even petitioned the organization to remove North Carolina from its list of approved states. This example underscores a larger issue: these generic solutions are often not tailored to the complex and varied laws of each state.

Do-It-Yourself

2. Lack of Perspective
There’s an old adage often attributed to Abraham Lincoln: “A lawyer who represents himself has a fool for a client.” The same principle applies to estate planning. When you draft your own estate plan, you’re too close to the situation to see potential blind spots. Even attorneys rely on outside professionals to review their estate plans for this very reason. Without the detached perspective of a professional, you may overlook key issues that could cause problems later.

3. Overlooking Legal Complexity
Estate planning may seem straightforward—write a will, name your beneficiaries, and you’re done. But in reality, it’s filled with complexities that laypeople often miss. Consider the following scenarios:

– What happens if a beneficiary predeceases you? Does their share go to their children, your other children, or their spouse?
– How are jointly held assets handled? These may not pass according to your will.
– What about beneficiary designations? Assets like IRAs, 401(k)s, and life insurance policies pass directly to the named beneficiaries, regardless of what your will says.

Even a small oversight, such as failing to update a beneficiary designation form, could derail your intentions.

4. Tax Implications
The way you transfer assets can significantly impact taxes. For instance:
– If you name your son as the beneficiary of your IRA, he will generally be required to withdraw the full balance within 10 years under the SECURE Act, accelerating income tax liability.
– If you name a trust as the beneficiary, the entire amount could become taxable much sooner, even if your son is the trust’s beneficiary.

These tax consequences may not be obvious, but they can have a major financial impact on your heirs.

The Value of an Estate Planning Attorney
A qualified estate planning attorney offers much more than just document preparation. They bring years of training, experience, and knowledge of the law to ensure your plan achieves your goals and avoids costly mistakes. Attorneys can help you:
– Address complex family dynamics.
– Ensure all assets—including retirement accounts, life insurance, and joint property—are coordinated with your plan.
– Minimize tax consequences for your beneficiaries.

DIY estate planning tools may seem like a budget-friendly option, but they often lead to expensive and time-consuming problems down the road.

Don’t Leave Your Legacy to Chance
Estate planning is too important to leave to guesswork or one-size-fits-all solutions. By working with Brandon McGee, you can create a plan tailored to your unique circumstances, ensuring your wishes are honored and your loved ones are protected.

Ultimately, you truly get what you pay for—investing in professional guidance now can save your family heartache and financial trouble in the future.

From the desk of Attorney Brandon McGee

Brandon McGee
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