DIY estate plan not for everyone
Estate planning mistakes can be expensive to fix — that is, when they can be fixed at all.
That’s the thought that haunts New York attorney Mari Galvin whether she’s creating an estate plan for a client or confronting the aftermath when people didn’t properly plan.
“People think, ‘Oh, I have a simple life,’ but you have to understand [that if] you make a mistake and you have unintended results, you can’t bring the person back to sign a new will,” says Galvin, a partner at Cassin & Cassin law firm.
Galvin is currently sorting out the $12 million estate of a man who thought his situation was straightforward enough to plan with do-it-yourself software. His mistakes left his executors without enough cash to pay the estate’s taxes, which has led to conflicts among the heirs, delays and considerable lawyer fees. “It’s an absolute mess,” she says. For many, though, do-it-yourself options may be better than not having any plan. A 2016 Gallup Poll survey found that only 44 percent of Americans have a will, which means most don’t have a plan to guide their families or determine who will take care of minor children. People who don’t have estate plans are stuck in denial, sure, but many are also intimidated by the perceived complexity and cost.
“There’s so many people out there who are just too afraid of the process, don’t understand it, don’t know where to start, don’t know where to go, that they’re doing nothing,” says Chas Rampenthal, general counsel for the self-help site LegalZoom. “That right there is a real tragedy, in my view.”
Fortunately, there’s middle ground between doing it all yourself and paying thousands of dollars for a lawyer.
LegalZoom, for example, offers users the option to consult with an independent attorney while using its software. A basic will without legal advice costs $69, while a bundle that includes advice is $149. At Rocket Lawyer, another self-help service that runs on a subscription model, users pay $40 a month for planning software and unlimited access to attorneys.
Prepaid legal plans, often offered by employers, may be another alternative.
Going straight to an attorney will be costlier, but prices vary. A basic will might be $300 to $1,000. The cost for a living trust, which is an alternative to wills designed to avoid probate, starts at about $1,500 and goes up from there, depending on an estate’s complexity.
Jennifer Sawday, an estate planning attorney with TLD Law in Long Beach, Calif., says people can save money by asking CPAs or other tax professionals for referrals and looking for attorneys who advertise, since they may still be building their practices.
“Understand that most estate plans are actually drafted by software programs, so what you are paying for is the advice on the documents you need, having the documents prepared correctly and having the deeds for your real estate recorded for you,” Sawday says.