South Florida Estate Planning Law : Florida Estate Planning Lawyer & Attorney : David Shulman Law Firm : South FL Wills & Trusts

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I can't believe it.

I have long admired the Wall Street Journal and considered them a paragon of straightforward and relatively high level journalism.  Sure the editorial page leans conservative, and there has always been a general pro-corporate tinge to its stories.  But I've always considered it more respectable than most other news sources.

Not anymore.

Today, the Wall Street Journal has led their readers horribly astray in such a manner that may cause untold pain and suffering (along with substantial costs) to God knows how many people.

I'm talking about their "review" of do-it-yourself estate planning.  Apparently, there is a recurring column in the WSJ entitled "Cranky Consumer".  It should be titled "Idiot Consumer."

In today's column, "Before It's Too Late: A Test of Online Wills", the author Jane Hodges (who I assume is the Idiot Consumer) decides to "test" two online will-writing websites "to see if we could knock out a coherent set of documents capable of organizing our end-of-life affairs."

She talks about how she tested various products including LegalZoom and Suze Orman's Will and Trust kit and describes the various documents that the website provides.  According to the Idiot Consumer, "Suze Orman bundled a will (which states what you want done with your assets and your remains after death), a revocable, or changeable, trust (which provides for management of your assets in the event you are incapacitated), and power-of-attorney documents."  

First, the description of what a revocable trust is and does is incomplete and inaccurate.  Not only can a revocable trust provide for management of your assets in the event of your incapacity (as does power-of attorney documents), but it also can govern the disposition of your assets upon your death outside of probate. 

Of course, nowhere in the article does the word "probate" appear.

The article continues, "Our needs, we figured, were simple. We're a childless married couple; we co-own a house but mostly keep our money separate. Each of us has a life insurance policy, general savings and multiple retirement savings accounts."  Um.. OK.  If I woke up in the morning and had a searing pain in my stomach, should I just figure it's simple and gas, or should I let an actual doctor examine me to make the determination as to whether or not I have appendicitis. 

She then writes, "Any other assets beyond the house would be split between the surviving partner and nieces and nephews, who could use the funds for college or other future expenses."  The problem is that the proceeds from life insurance policies and the disposition of retirement accounts are not governed by a person's will!  They are controlled by the beneficiary designations on the accounts.  Unless the designated beneficiary of those accounts is her estate or is blank (which is a huge mistake in itself), those online documents she reviewed are useless when it comes to life insurance or retirement accounts.

Furthermore, does she really want to give the money to her young nieces and nephews outright?  Will that require a costly and intrusive Guardianship to be established to monitor the accounting of the money? In some states it might.  Does she want them to be able to blow the money at 18, or is it a better idea to establish a trust to hold the money until the child is older?  Do you think the website asked?  If so, do you think the $13.50 (for real!) Suze Orman Program structured the trust correctly?

Then, "with the revocable trust, we weren't sure how to earmark our share of real estate for our spouse, then divide the rest of our assets so that the surviving partner would get 50% and nieces and nephews would divide the remainder."  I do not know where she lives, but generally, if she and her spouse own the home jointly, then the survivor automatically inherits the entire property on the death of the first spouse.  Furthermore, in Florida, where I practice, it is a terrible idea to take a homestead that is jointly owned by a husband and wife and put it in a revocable trust.

The entire article spoke about how "easy" it was to draft various provisions and frankly, how cheap they were.  

But there should be one and only one relevant question, and this is "Do the documents work?"  In the event of her death, do the documents accomplish what she wants them to do, while minimizing taxes, protecting her heirs from creditors, and keeping administrative expenses and time and headaches to a minimum? 

What's the idiot consumer's answer to that question?

"We didn't hire a lawyer to review them."

That's some mighty fine journalism there, WSJ.