11/16/2022
Do It Yourself Estate Planning
Estate Planning
November 10, 2022
The temptation to draft your own will, even a trust, may be strong. We see advertisements for forms that can be obtained online and easily adapted to various specific situations. Online forms are not necessarily “bad” but they tend to try to address every situation using a “one size fits all” approach. If you are really in a “do it yourself” mode, there are some things you should first consider.
First and foremost, be sure you know what each paragraph in the form is saying and what each word in the paragraph means. True story – I had a very sophisticated, Harvard Business School graduate as a client many years ago. Although lawyers generally do not like to be asked to review documents prepared from online sources, I had worked with this individual for a long time and he was a very good client so I agreed to review the will he prepared using a form he found online. It was pretty generic in its approach and did cover almost everything a will should cover. But there was a big problem, the client got his terminology confused and, although he wanted to name me as executor of his estate, he actually named me the sole beneficiary of his estate. This was a nice gesture, but probably not what he really wanted!
Secondly, online forms may omit something. Most obvious is that these forms tend to focus on distribution of assets and related matters after death and fail to consider protections that should be in place while someone is actually alive. Any solid estate plan in Massachusetts will include pre-directives such as durable powers of attorneys and health care proxies. See prior Insight Blogs where this is discussed.
Thirdly, to be valid, a will must be executed following strict but essential rules. It is unlikely these rules are sufficiently outlined in an online forum. In Massachusetts, for instance, it is required that the signer of the will and all witnesses be in the same room at the same time for the entire duration of the signing process. If one of the witnesses leaves to take a phone call and is absent for just thirty seconds, the will can be deemed invalid. Also, although wills are not required to be notarized in Massachusetts, the better practice is to have them notarized. This can be overlooked in a self-drafted document.
Past Insight Blogs have touched on alternatives to a formal estate plan and, chances are, a devoted “do it yourselfer” will likely be receptive to this. Why even worry about an estate? You may decide to arrange your personal holdings so there are no assets to probate. There are ways this can be done but you should careful.
Most brokerage accounts and many bank accounts can designate that anything held in them to be POD (paid on death) to specific individuals. This can work, but if you have more than one account and more than one heir, it could get messy. Some people try to maintain equal balances in, say, four different accounts, each with a different child’s name on them as the POD recipient. This is fine until the owner needs money to buy a new car and uses one of the four accounts. Unless something is done, the child whose name is on the used account gets nothing but the other three get their inheritance.
Adding a child’s name to the deed of the house will allow it to avoid probate. But if the owner wants to sell or re-finance the property, they will need the child’s cooperation and signature. Probably won’t be a problem, but who knows? Having a child’s name on the deed can have other repercussions too. College applications for loans or scholarship could be impacted if the child’s name is on the deed as an owner of the house. Also, if there is a divorce situation, this can have disastrous effects.
The message here is to be very careful and consider all possible consequences of doing whatever you think you want to do. There are proven options to address all of this and professional assistance may save your family from a divisive and very expensive controversy.
