Wednesday, September 26, 2012

Can You Trust Your Trust? Why an Online Will or Trust Could Be the Dumbest Mistake You Ever Make

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In this article, WealthCounsel member David Hiersekorn discusses the hidden dangers of consumers using online legal forms, often referred to as “do it yourself (DIY) wills and trusts.” Hiersekorn notes at the end of his article that “You only get to use an estate plan once. If you screw it up, you’ll never know, but your family will.”

Online legal document services offer an enticing bargain. Most people realize that they need an estate plan to manage their affairs if something happens to them. And, let’s face it, estate planning attorneys are expensive.

That’s why many consumers are now questioning whether it’s possible to skip the attorney fees and use a low-cost website to prepare estate planning documents. The short answer is that, yes, it is possible. But, it’s not recommended. You could save a few bucks now, but end up creating an expensive and frustrating mess for your family.

Unfortunately, most people don’t realize what they are getting themselves into with an online document service. That’s because the online services have spent millions trying to create the impression that their services are similar to those of an attorney. They put lawyers in their commercials, hire celebrities to promote them, and even tout stories of people who have successfully used their documents.

But, all the marketing in the world can’t erase the simple truth. The online services aren’t law firms. They aren’t lawyers. They can’t give legal advice. Instead, they are “document assistants” – a term that states use to define service providers who type your information into generic form documents.

In other words, a document assistant is like a mindless typing zombie who enters your information into a form, whether or not it makes sense and whether or not it is a good idea. If you are stuck, they can’t help you. If you make a huge mistake, they can’t warn you.

It would be a crime for them to warn you. It doesn’t matter if the guy working on your documents is an estate planning genius. He’s simply not allowed to give legal advice. Think of it this way. A person needs a law license in order to give legal advice, just the same way that a doctor needs a license to write a prescription. Giving legal advice without a license is very much like selling drugs without a prescription. It’s a crime.

So, these companies design their generic forms so that, even without legal advice, it’s hard to make mistakes. That may seem like a good thing. But, it turns out that the best way to make sure that your documents don’t do anything wrong is to make sure they don’t do anything at all. They’re just do-nothing, one-size-fits-all generic documents.

That leads to the next problem with the online services. They can’t even promise you that the documents will work. Again, they can’t. They aren’t attorneys, which means they can’t promise a particular legal result.

Many clients are excited to learn that they can leave assets to a special needs child without jeopardizing government benefits; or, that they can protect a child’s inheritance from frivolous lawsuits, divorce or bankruptcy. A well-designed estate plan makes sure that your resources get where you want them and that they are used in the way you instruct. It’s about creating legally-enforceable provisions that do what you want done.

And, the online document services can’t promise any of that. They can’t promise you’ll achieve your goals. They can’t point out opportunities, and they can’t warn you about hidden hazards. Really, all they can do is save you a few bucks.

Justin Peltier is a  Massachusetts estate planning attorney with offices located in Merrimac, MA with the sole focus of estate planning, elder law, probate and trust administration, and business planning. Please view our website for more information at or join our social media community below. You can also reach me directly at or (978)319-6006.