Many companies currently provide people with the opportunity to create a Last Will and Testament and other various legal documents online. These online Wills have various issues that can cause your estate to not be distributed as intended, can create excessive legal fees during the estate administration, and make life on your family and friends even more difficult after you pass away. I went through the process of creating an online Last Will and Testament to get a sense of the various pitfalls. For this exercise, I did the basic Last Will and Testament on a popular well-advertised online program.
Pitfall #1: Have No Spouse or Children.
During the questionnaire phase of the online Will process, they require you to put in the family information of your spouse and your children. However, not everyone has a spouse or children. When this situation occurs, the probate process is a lot more difficult. The Surrogate’s Court will need to know the closest distrubutee(s) of the decedent. For example, this may be a sibling or a cousin. A practicing attorney would always have the client fill out a family tree in these situations. Often, in situations where a person has no spouse or children, a revocable trust is recommended. Creating a Will online does not inform you about the possibility of creating a revocable trust that may accomplish your goals more effectively.
Pitfall #2: Assets
A person’s assets can determine what estate planning strategy is right for them. A person with a high net worth may need certain trusts in their Wills for tax planning. In addition, it a common misconception that the Will covers all your assets. A Will only covers assets that are not passed by operation of law (such as joint ownership), through a trust, or have a beneficiary designation listed. The online Will process did not inform me of this and not knowing this can lead to a person’s wishes not being correctly applied at death.
Pitfall #3: Leaving Money to People with Disabilities and Minors
The online Will process allows a person to leave money to their children outright. This poses numerous problems if a child is a minor, is a spendthrift or has a disability. If a child has a disability, it is often beneficial to leave their portion of the inheritance in a Supplemental Needs Trust for that child’s benefit thereby allowing them to maintain eligibility for government benefits, such as Medicaid and Social Security. Furthermore, leaving money to a minor child can cause a myriad of issues in the probate process. A guardian will need to be appointed for the minor child, which can lead to frustration, excessive administration fees, including bonding requirements, and ongoing court oversight.
These are just three of the many pitfalls that I noticed throughout the process. The online wills process was generic and did not account for the specific details that are necessary to properly draft estate planning documents. It is very important to hire an experienced attorney to draft and execute your estate planning documents to make sure your wishes are being carried out, tax and trust planning is being considered, the Will is properly executed, and your estate administration is not a difficult one. We at Littman Krooks are here to help you with your estate planning.
If you would like to learn more about this topic, I am hosting a Zoom Conference on this topic on February 9th. Watch the replay here. Contact us with additional questions by calling 914-684-2100 or click here.