The Pitfalls of DIY Estate Planning

Aug 30, 2022 | Estate Planning & Administration

In an age where almost anything can be accomplished online, “do it yourself” estate planning websites have recently increased in popularity.

While online estate planning may seem appealing when considering short-term cost savings, the long-term risks may not pay off for everyone. Each person’s circumstances are unique. Estate planning is not a one-size-fits-all process, as DIY services might suggest. Life is complex and individual asset holdings vary—from joint accounts, multiple investment accounts, real estate, and other personal possessions. Important life events, such as the birth of a child or grandchild, adoption, a child with special needs approaching majority age, marriage, divorce, a significant change in wealth, health diagnosis, or retirement can also impact an estate plan. Tax implications are another important consideration—especially if the estate exceeds the federal lifetime gift and estate exemption amount, which in 2022 is $12.06 million per person, or $24.12 million per married couple. (Amounts in excess of this exemption are subject to estate or gift tax at a 40% rate.) Your estate plan should be customized to your needs, and online services do not offer the same personalized approach and attention to detail as an estate planning attorney.

Establishing an estate plan may require numerous legal documents, including wills and trusts. A DIY Last Will and Testament could negatively affect an estate or fail to accomplish the intentions of the deceased. It may also potentially give the testator a false sense of security that all his or her affairs are in order and as a result, he or she may not draft an updated, more effective or comprehensive estate plan with an attorney when their circumstances change. Trusts are generally more complicated than wills. If your trust is not drafted or funded properly, the entire document could be negated.

Estate planning is a specialized area of law, based on statutes that vary by state and sometimes change. Each state has procedures and requirements that must be followed for a will or trust document to be considered valid. If your estate planning documents are drafted poorly, your family may have to take on the added time and expense of hiring an attorney to help carry out your wishes. If your family members disagree on the intention of your estate plan, they may have to engage in costly, time-consuming litigation to settle contested issues. Having a customized plan and strategy in place can preserve family harmony and may avoid conflict and unnecessary financial expense.

It is important to consult an estate planning professional who can help you develop a strategy for your estate plan that is right for you and your family’s specific circumstances. Cumberland Trust, as corporate trustee, along with your chosen team of professional advisors, will work together to ensure your plan is tailored to your needs and your family’s wealth and legacy are preserved.