Online DIY Estate Planning Options
There are many online estate planning services available at low cost, ranging from the behemoth of online 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 online 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 online 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. In addition, your bank or investment house, such as Fidelity or Charles Schwab, may have its own durable power of attorney form. 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 online 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 before ending the initial meeting where we discuss the plan. That way there’s a clear deadline for everyone involved.
Here’s a thumbnail sketch of the most popular DIY on-line programs.
Nolo.com is a wonderful website full of clear information about estate planning and other consumer-oriented legal fields. It sells its Quicken Will & Trust Maker for $99.99. Technically, rather than being an on-line system, this is software that you download to your own computer. Given Nolo’s resources and experience, users should be confident that it offers well-drafted forms. Nolo also provides great consumer-oriented information both online and in its many downloadable manuals.
LegalZoom.com, the most established online legal provider, offers a number of estate planning forms as well as bundles of forms, with wills starting at $89, health care powers of attorney at $39 and revocable trusts at $279. For relatively little money, such as $20 when buying the trust package, you can ask questions of attorneys for two weeks. This renews monthly at a cost of $14.99 or annually for $119.88. It does not appear that the independent lawyers in its legal network edit documents—instead providing answers, advice, and guidance over the phone.
This seems like an excellent deal. The caveats are the experience levels 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.
The television financial planner, Suze Orman, tells her viewers not to go to a lawyer for their estate planning but instead to buy her $69 online 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:
- Revocable trust
- Financial durable power of attorney
- Durable power of attorney for healthcare
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 online 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.
Willing.com is a free website for making a will that incredibly easy to use – “user friendly”. It charges $69 for a will, $149 for a package that includes a durable power of attorney and health care directive, and $299 if a revocable trust is added (as of this writing). You don’t have to pay until you’re ready to print out the documents, so you can test out the program for free. My immediate response is that it has the best user interface of all the options I’ve reviewed.
RocketLawyer.com, like LegalZoom, provides online legal forms in a variety of legal fields, which are free for members ($39.99 per document for non-members). After a free 7-day trial, users can subscribe at a rate of $39.99 a month for the unlimited use of forms, unlimited attorney consultations, and benefits for setting up a corporation. Consumers who don’t want to commit, can buy many of the services offered an an a la carte 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.
6. Trust & Will
Trust & Will is another simple-to-use on-line program similar to Willing.com in terms of being a more modern site focused exclusively on estate planning. It starts with an easy to use list of questions in boxes the user can simply check off to determine if issues apply to them. When I did that somewhat randomly, the program suggested I use a trust, the cost of which started at $399. A will by itself starts at $89.