On-Line DIY Estate Planning Options

 In Practical Matters, Revocable Trusts, Wills

There are many on-line estate planning services available at low cost, ranging from the behemoth of on-line legal services, www.legalzoom.com, to the granddaddy of DIY legal services, www.nolo.com, which started as a publisher of legal manuals for laypeople. They are all good and far better than no plan at all. We discuss some of the pros and cons of doing estate planning on your own or working with an attorney in this post.

The main problems with DIY programs are (1) that you cannot know what you do not know, (2) you don’t have anyone to ask questions and (3) that the forms may be better designed for some states than for others. Some on-line services, such as LegalZoom and RocketLawyer offer low-cost consultations with panel attorneys as well as their forms, but it seems like the two are not connected. The consumer must still complete her own forms even if she can call a licensed attorney with her questions.

In addition to using a DIY program, it always makes sense to do a quick on-line search to see if your state has statutory forms for durable powers of attorney and health care directives. You may be able to download and execute these free of charge. Finally, when using a DIY program, be clear to read all of the instructions very carefully. You don’t want a document to be invalid because, for instance, a signature wasn’t notarized or an interested party served as a witness.

One of the questions I have with on-line estate planning programs is how many consumers actually complete them. Do they get started, come to a question they can’t answer or a decision they can’t make right then and there and not get back to back to it? Do they complete the forms and never get around to bringing them to a notary to witness their signatures? One of the advantages of working with an attorney is that the attorney will push to get the work completed. In our office, we schedule the meeting for the document execution as soon as we’re hired so that there’s a clear deadline for everyone involved.

Here’s a thumbnail sketch of the most popular DIY on-line programs.

  1. Nolo.com.

Nolo.com is a wonderful website full of clear information about estate planning and other consumer-oriented legal fields. It sells individual documents with the following prices as of this writing:

Will                                                        $34.99

Trust                                                      $59.99

The sample will on the website is well-written and comprehensive, permitting specific bequests of specific items and even creating continuing trusts for minor children. Nolo seems to offer only a limited power of attorney and selected state living will forms on line. It does, however, sell the Quicken Willmaker Plus program for $54.99 (also offered for $89.99 discounted from $129.97 elsewhere on the site, all prices as of this writing), which rather than being on line is a downloadable document assembly system, also available on CD. It includes a will, durable power of attorney and health care directive. Its purchase also includes a one-year subscription to Nolo’s on-line trust package. It may be used for all family members.

While I’ve only reviewed the will form, given Nolo’s resources and experience, users should be confident that it offers well-drafted forms. I find it a bit confusing that some forms are offered on line, while others require downloading Nolo’s Willmaker forms system. In addition, while Nolo provides great consumer-oriented information both on-line and in its many downloadable manuals, I was a bit disappointed in its link titled “Is Nolo’s online will right for you?” This simply brings the reader to its FAQs page which doesn’t directly provide guidelines as to when and when not to use the system.

The bottom line is that if you determine based on the guidance on this site that a DIY system makes sense for you, then you should feel comfortable using Nolo’s Willmaker system. You will need to use that system because it’s the only one that includes a durable power of attorney and a health care directive. If you choose to use a trust, you will then need to combine this with Nolo’s online trust (at no additional charge).

  1. LegalZoom

LegalZoom.com, the most established online legal provider, offers the following estate planning bundles (as of this writing):

Will, health care directive, durable power of attorney Plus trust
One person $149 $299
Two users $249 $349

 

All packages include one year of attorney advice which involves an unlimited number of 30-minute consultations. (Frankly, I don’t understand how they can offer the legal consultations at these prices unless they’re betting that few of those who sign up will take advantage of the service.)  It does not appear that the independent lawyers in its legal network edit documents, instead providing answers, advice and guidance over the telephone.

This seems like an excellent deal. The caveats are the experience of the attorneys who participate on the panel. While they are supposed to have at least five years of experience, a spot check on the biographies of a few panel lawyers shows that many have less experience. On the other hand, they may work at firms where senior attorneys can assist with questions the junior attorneys cannot answer. It’s also not clear what happens when and if the clients are advised that their situation is such that the LegalZoom forms won’t meet their estate planning goals. Do they get a refund? Does the panel attorney take over the work, revising the LegalZoom forms or discounting her normal fee by the amount paid to LegalZoom?

I did not purchase the LegalZoom forms and cannot comment on their quality. But my assumption is that they are good given that LegalZoom has the resources to hire excellent attorneys to draft them.

  1. Suze Orman

The television financial planner, Suze Orman, tells her viewers not to go to a lawyer for their estate planning but instead to buy her $90 on-line package of  four “must have” documents which she claims has a $2,500 value – the amount she says a lawyer would charge. You can do so at this link: http://www.suzeorman.com/books-kits/collections-and-kits/must-have-documents/

It’s a good, comprehensive program that includes explanations of those “must have” documents:

  • Will
  • Revocable trust
  • Financial durable power of attorney
  • Health care power of attorney and advance directive

One problem with the program is that the user only learns after he buys it that perhaps he should see a lawyer. Within the program, Orman advises anyone with children with special needs or estates of over $1 million to go see a lawyer instead. This is because she recognizes that the options are too complicated and too unique to be handled by an on-line DIY program. Orman developed the program with California attorney Janet L. Dobrovolny, which results in the documents being somewhat California oriented, which may or may not present a problem outside of the state. I also found that in attempting to create a highly-tailored end product, the program becomes quite complex in a way that many users may find daunting.

  1. Willing.com

Willing.com is a new, free website for making a will that incredibly easy to use – “user friendly” and free. It charges $149 for a packaged that includes a durable power of attorney and health care directive and $299 if a revocable trust is added (as of this writing). My immediate response is that it has the best user interface of all the options I’ve reviewed.

  1. RocketLawyer.com

RocketLawyer.com, like LegalZoom, provides online legal forms in a variety of legal fields, and the first one is free. After that, users can subscribe at a rate as low as $7 a month for one form a month and as high as $49.95 a month for the unlimited use of forms, unlimited attorney consultations and benefits for setting up a corporation. An intermediate plan for $39.95 a month that includes everything in the premium plan except for assistance in setting up a corporation. Both the intermediate and premium plans seem to be aimed at companies that need legal documents on an ongoing basis.

I tested out the will creation software and found it easy to use and comprehensive, but too comprehensive for my patience. It asks many of the questions that in our practice we simply assume answers for our clients in order not to get too bogged down in ancillary details. For instance, should the trustee who would manage a trust for your children if you were to die while they are minors have to purchase a bond? What about the successor trustee in the event the first trustee can’t serve or stops serving for any reason? Bonds are expensive and require reporting which otherwise is usually not necessary. Presumably, you are appointing someone you trust who is unlikely to abscond with the funds. We don’t require bonds in our documents and never ask our clients whether one should be required. So far, we’ve never had a problem with this (just knock on wood), but we’ve saved countless hours in terms of discussing this and helping clients make a decision. I’d streamline the RocketLawyer will creation questionnaire if I were them.

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