This is the first in a series of blog posts we’ll be doing on DIY estate planning. The thing to realize about an estate plan is that it isn’t a single document or contract. It’s a series of legal documents that establish what you want done with your property and belongings – including your house, vehicles, money and valuables – after you die.
Before getting into the details, we need to present some very clear conditions right up front.
- NowInsured is not a law firm. This blog post is for general informational purposes only, and you shouldn’t treat this as legal advice. If you think you need specialized legal counsel, you should find an attorney.
- NowInsured doesn’t have a dog in this fight. It goes without saying that we’re biased in favor of final expense insurance, but when it comes to your general estate planning, we’re impartial as to whether you decide to find an attorney or try a do-it-yourself approach.
- NowInsured is not affiliated with any of the organizations named in this blog post. We will refer to them as providers of services or sources of information, but none of those references should be considered endorsements of any kind, and we are receiving no commissions or kickbacks of any kind for mentioning them in this post.
DIY Wills: Pros and Cons
Getting a will is probably the first thing people think about when it comes to estate planning. A will establishes which individuals or organizations will receive assets that you leave behind.
As pointed out here, hiring an attorney to create a last will and testament can cost as much as $1,200. Of course, the internet has responded; you’ve probably heard about services like LegalZoom and Quicken that allow you to create a will inexpensively. Visit that link for an expanded list of online will makers. These services are all fairly similar: they ask you a series of questions, and their systems adjust the language of the will based on your responses.
Overall, this seems like a sort of cookie-cutter that probably works well for a lot of people. However, several sites reported a real risk in using these services. Nerdwallet shared the story of a man who thought his will was simple enough to set up through an online service. He made a lot of mistakes in the process, which has created a lot of conflict among his heirs and generated a lot of lawyer fees, which will be paid out of the inheritance.
One reason that DIY wills can create problems is that your life situation may change after you signed your will. As SmartAsset points out, “If you have kids, get married or divorced, or come into a large sum of money or valuable asset, you’ll need to adjust your will to account for the change.” Obviously if you are at a stage in life where you don’t expect massive changes like these, then an online service might make sense for you. But people don’t usually expect big life changes.
Some online will makers have adjusted their services to address these problems. LegalZoom gives its users the option to consult with an attorney for an extra fee. And Rocket Lawyer’s subscription model has an option for access to an attorney.
Here are a few other things to take into consideration when doing your own will.
- Make sure that the will is properly signed, with the correct number of witnesses. You’ll have to get it notarized, and you’ll need witnesses on hand when it’s signed. According to the American Bar Association, most states require at least two witnesses, and some require three.
- Be aware that certain assets can’t be passed on in a will. As explained by Consumer Reports, “For instance, if you own a house jointly and your spouse has the right of survivorship (a type of ownership that is spelled out in your house deed), he or she will get your share of the home when you die. If you open a payable-on-death savings or brokerage account, the cash and securities in those accounts will go directly to the beneficiary that you name on the bank or brokerage house’s forms. Moreover, your 401(k), individual retirement accounts, and life-insurance policies will pass to beneficiaries you designate in those documents.”
- Make sure that your will is someplace easily found after you pass away. We’ve all seen movies that involve some sort of high-stakes drama when somebody dies and nobody knows where the will was kept.
We’ll cover other issues around estate planning in upcoming blog posts.