To DIY or Not DIY… YOUR ESTATE PLAN?

"Why can't I just create my own estate plan?"

Given the current COVID-19 situation which is keeping us all at home, I thought this was the perfect time to address this topic. I am asked this a lot.  I mean, why can't you do a Last Will and Testament at home? It's easy, right?

First, let’s take a look at Legal Zoom’s disclaimer: “We are not a law firm or a substitute for an attorney or law firm. We cannot provide any kind of advice, explanation, opinion, or recommendation about possible legal rights, remedies, defenses, options, selection of forms or strategies.”

Remember the old adage, 'you don't know what you don't know?' Never was that more fitting than in the realm of estate planning.  (This probably applies equally to, say, race-car driving, but that’s not our current topic!)

Did you know: 

  • Presently, there is somewhere in the neighborhood of $80 Billion in state departments of unclaimed property across the country?  These are assets that went unaccounted for, about which surviving family members knew nothing, and are now being held by the state!
  • If you do not have a power of attorney in place, drafted correctly, and witnessed according to state law, your family may have to go to Court to get guardianship over you in case of your incapacity. This could take weeks or months.
  • Washington state has an estate tax floor of $2.193 Million and your estate will be taxed if it exceeds that amount on your death. This can be avoided or mitigated with careful planning.
  • California probate takes one full year to complete, often longer, and the fees and costs charged are a percentage of the value of your estate. For example, a $500,000 estate can cost as much as $28,000 in costs and fees!
  • Beneficiary designations trump your Last Will and Testament. Have you checked yours recently?

For those with small children, if you don't choose your guardians, the Court will decide for you.  Without any planning, your children could also receive their inheritance at 18, rather than older, when they are more likely to be financially responsible enough to manage a windfall. Are you in a blended family and have kids from another relationship? Without considering how to account for that, your money could pass fully to your spouse or partner, effectively disinheriting your children.

In truth, incorrect planning can often be worse than doing nothing at all. You may inadvertently end up requiring your executor to obtain a bond (similar to insurance). If your executor has poor credit, the Court could require a court-appointed executor, which is costly, and time-consuming.

You may not give your executor non-intervention powers, which requires the court to be involved in it. Every. Single. Step. You could create a trust document that is neither warranted nor correctly drafted.  Or, you could exclude important provisions from your power of attorney, requiring your family to run to court if you are incapacitated.

Moreover, if DIY estate plans were so easy, why haven’t you completed yours yet?

Your legacy should reveal to your loved ones just how much you cared for them. If you have questions about how to correctly and comprehensively get your affairs in order, we are here and ready to help. (And by "here" I mean, virtually "here"!)   Contact us today!

 

 Kira M. Rubel

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