We all know we need a will so that our affairs will be in order and our last wishes carried out once we have passed on. But did you know you have options when it comes to creating a will? You may have heard that you can actually do-it-yourself when it comes to creating a will, and it is fairly easy to accomplish online.There are a few considerations to make, however, before going this route.
What Is a Do-It-Yourself Will?
Just as it sounds, a do-it-yourself will (or DIY will) is a last will that you create yourself, without the help of an attorney. In most cases, you utilize an online tool to download and print forms. Fill out the forms, upload your information and the online service will create your will.
Advantages of an Online (DIY) Will
Advantage #1: Avoids Lawyer Fees
There are, of course, costs associated with having an attorney help draw up your will. Some lawyers will charge a flat fee for creating wills, which can vary greatly - if it's drawn up by a true estate planning attorney, those costs will likely exceed $1,000. Others may charge hourly. If this is the case, you can expect hourly rates of typically $150/hour and up.
While you may still have to pay a fee to use online resources, taking a do-it-yourself approach is almost always initially a more cost-effective option.
Advantage #2: Saves Time
Creating a will using an online service can be a huge time saver upfront. If you have all the information ready, it can take a matter of minutes or an hour or two. You’re able to complete the entire process from the comfort of your home, and there’s no need to make an appointment, commute to an office and meet with an attorney face-to-face. The only thing you'll have to remember to do, is to make sure the will is signed and witnessed appropriately in the presence of a notary public. This step is often skipped, but is required in order for the will to be valid and accepted in a court of law.
Disadvantages of an Online (DIY) Will
Disadvantage #1: Could Cost Your Heirs Time & Money
Wills can be complicated - and you want to know that yours will stand up to scrutiny. When it comes to ensuring your estate is cared for and passed on in a way you’re comfortable with, having an airtight will is key. Any mistakes, misinformation or improper execution can end up costing your heirs time and money later down the line.
If your estate must be probated because your will was improperly executed, this again could cost your heirs time and money before they’ll be able to receive or access their inheritance. Paying higher fees now for a properly drafted estate plan could help avoid certain probate costs and simplify your estate and decisions that need to be made by the people you care about.
Disadvantage #2: Asset Protection May Be Neglected
Let's assume you've left a sizable inheritance to your oldest daughter. That daughter got married at age 26, and is now going through a divorce at age 30. Your online will left her assets to her in trust, but that trust dissolved when she turned 25 and the assets were fully in her name. Would you be happy to realize that half of her inheritance was considered marital property and lost to her ex-husband in the divorce decree? Most online wills fail to address situations such as this.
By properly designing trusts that would be created in an estate plan, you can protect the assets of your heirs from things like failed marriage, failed business, or other litigation they may face in their adult lives.
Disadvantage #3: Tax Planning
If you’re particularly concerned about the tax burden your heirs will face upon your death, a DIY will may not offer the more sophisticated tax solutions needed. Tax law changes regularly. Having a relationship with a dedicated estate planning attorney will help ensure your documents are up-to-date with the latest tax law changes.
For instance, in this century alone, we have seen personal estate tax exemptions ranging from $1M all the way up to $11.58M. With our country's current debt situation coupled with challenges in providing social security and medicare to retirees, there will always be pressure on that exemption and changes that could have a significant impact on your estate plan. By crafting certain language and trust planning in your documents, you can ensure your heirs receive the most possible benefit from your life's work. Unfortunately online (DIY) wills can't guarantee the same results.
Who May Benefit Most From a DIY Will?
Taking a do-it-yourself approach to your will means you will have no assistance from a licensed professional. If your estate is fairly large or complex, you may need the expertise of an attorney. Additionally, if you have dependents who are minors (like children or grandchildren), you need to know that your will depicts exactly how they should be cared for after your passing. If that’s the case, having an attorney involved can help make sure you’ve put the proper measures in place. If you don’t have any dependents, and your estate is fairly small, taking a DIY approach may be sufficient.
Obviously budget is always a concern for some families as well. If you decide to go the DIY route, it would always be advantageous to have an attorney you trust look over the documents to ensure all of your biggest concerns are addressed.
If you’re currently working with a trusted financial advisor, ask him or her to help you determine whether or not a DIY will might work for you. If not, they may have their own network of attorneys available to help in your estate planning needs.