Before It’s Too Late - Eric Gullotta


Online estate planning

In the age of the internet, just about anything you can think of (and quite a few things you wouldn’t dream of) can be bought, sold, prepared or conceived of online. Not surprisingly, you can even prepare your estate plan online.  But should you?

Right from the start you know I am biased. How could I not be — I prepare estate planning documents for my clients for a living. I am also in a good position to discuss the issue because I have seen many pre-made estate planning forms and have dealt with their shortcomings and pitfalls.

Let’s start with the obvious. Online estate planning is cost effective. Currently on nolo.com (a legal document preparation site) you can download “Living Trust Maker Software” for $64.99. Add in the “Online Will” for $34.99 and “Living Wills and Power of Attorney for California” for $17.99 and you have the basis for a comprehensive estate plan for $117.97.  Every attorney charges a different amount to prepare estate planning documents, but no attorney is charging $117.97. At this price point, using online documents appears to be a real money-saver.

These online documents or tools provide you with the basic documents that you then fill-in; you might be prompted to respond to a few questions in order to complete the documents. What is conspicuously lacking is the competent advice of a seasoned professional.

How will you know how to best answer the questions they are asking without fully understanding the questions themselves? For example, when asked to name a successor trustee, many people name two (or unfortunately more) trustees. This may be ill advised if the trustees don’t get along, or don’t have a history of working together. In California, by default all acts by co-trustees must be unanimous. This means that if the trustees disagree, they are off to court to settle their differences. Court is the last place we want our estates or trusts to end up.

In my opinion, the most important aspect of a trust or will is not who gets your property but how they get it. This involves restricting how minors, people with special needs or spendthrifts receive their inheritance. This is often where my clients and I spend a lot of time, discussing possible scenarios and outcomes so that we can craft a trust or will that really is in the best interest of those receiving it. Online forms cannot substitute for the brainstorming and bilateral thought process that accompanies a traditional meeting with an attorney.

Are the online documents accurate? The nolo.com trust software indicates it is the 3rd edition from 2010. Trusts that are three years old are suspect at best. Given the frequent changes in estate taxes and other developments, three-year-old documents shouldn’t be relied upon. Most estate planning attorneys stay up-to-date year after year with continuing education, trade journals and discussions with their peers. It appears nolo.com has not updated their forms in a while.

Where do you go when you need to put these documents to work? One advantage of having an attorney prepare your documents is that you establish a relationship, and if (when) those documents are needed, you have someone you know who you can call on to assist you in your time of need or loss. You don’t want to be hunting for an attorney while dealing with a difficult life situation. Additionally, the attorney who drafted the documents will be familiar with your wishes.

Finally and most importantly, when you create these documents online, how do you know they are correct and legally binding? I have seen many unsigned documents. I have seen notarized wills (wills must be witnessed and cannot be notarized).  I have seen documents with conflicting provisions that guarantee both sides won’t be happy. Most attorneys do the job right. While we may differ on the use of certain provisions or have stylistic differences, if you use an attorney you can almost guarantee that you will have a legally binding and effective document that is typically backed up by an attorney’s errors and omissions insurance. If attorneys do mess up, their insurance pays for your damages, something the online documents definitely don’t have.

If you were going skydiving, how would rather have your chute packed? By yourself using directions and diagrams you found online? Or, would you rather have a veteran skydiver who has packed a thousand chutes do it for you? Of course you’d choose the veteran. Why? Because when it comes time to put that chute to work, there is no room for error or mistakes. It must be done right the first time.

Eric S. Gullotta, JD, CPA, MS (Tax) focuses on estate planning and taxation law. His office is located at 232 West Napa Street, Suite A, in Sonoma. Contact him at 938.7234 or Gullottalaw.com.

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