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

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.

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I have written in the past about the dangers of "do it yourself" wills.  I have pointed out all of the traps for the unwary regarding Homestead, the Surviving Spouse, and Pretermitted Heirs.  One thing I haven't written about is the danger of improperly signing the document.  If the proper procedure is not followed, it does not matter how good the Will is, and it does not matter what the signer's intent was.  An improperly signed Will is invalid, and the estate passes through the laws of intestacy.

(Like always, this post only covers the law of Florida.  The laws in other states may vary).

In Florida, the laws regarding the execution of Wills is covered by Florida Statute 732.502.  Under the statute, every will must:

1. Be in Writing;
2. Signed by the testator, or if the testator is unable to sign (say due to paralysis), signed by some other person in the testator's presence and at his direction;
3. The Will must be signed in the presence of two witness who are also in the presence of each other.

I can't tell you how often people mess up #3 above.  When I do a Will Signing, me, the testator and the witnesses all sit at a single table, and no one leaves until everyone is done signing.  I will serve as the notary.  

A handwritten will without two witnesses, is invalid.  A Will in which the testator's signature is notarized but there are no witnesses is invalid.  If you take the Will to the bank, and one person Witnesses the signing, and then goes and gets another teller (who did not witness you or the other witness signing), then that Will is invalid. 

The law is strict and unforgiving, and there are no exceptions at all.  If the Will is invalid then the estate passes by way of intestacy, in which there is a predetermined formula as to how the assets are distributed.   

So even if the "DIY" Will is perfectly drafted, if it is improperly executed, then it is invalid.

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Professor Beyer over at the Wills, Trusts & Estates Prof Blog links to an article in L.A. Times titled, Wrangling over Michael Jackson's Estate could revive sales of online wills.  

While it is a good thing for people who have no estate planning documents to take steps to get them done, an online will is not the right way to do it.  I'm afraid that too many people will order these online wills and then either not execute them properly, which would cause them to be invalid; or they will put improper devises in them.

If you do not have your estate planning documents done, please see an attorney.  The pain and suffering that your loved ones will encounter after your death if you have an invalid will is not worth the few hundred dollars you might save while you are alive.

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I apologize for not updating this, my continuing series (and my blog in general) in which I order estate planning documents from an Internet document service. As I previously wrote, I attended the ABA Techshow in Chicago, and got sick when I came back.  Between the late nights, and the Chicago cold, and the uncirculated airplane air, I've been fighting a pretty bad cold.  I'm really feeling better though, but not 100% yet.

To refresh your recollection, I am going through the process to see what a customer of this site is offered and what type of documents they produce.  As I've said, my philosophical issue with these services is that they allow customers to choose what they want, instead of having a professional discuss with them what they need

In my last installment, I decided that I needed a Living Trust (even though I would never recommend a Living Trust for someone in my circumstances).

The first question:  What type of Living Trust would I like to make?

I don't know the answer, so I click on the Help button.

As you can see, the Help page is filled with error and ambiguities.  I certainly hope that anyone who actually needs an "AB" trust (generally couples that have more than a couple million dollars) would see an estate planning attorney to begin with.

I decide I want an Individual Living Trust, and move forward.

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I am still in Chicago for the ABA Techshow, which bills itself as "The World's Premier Legal Technology Conference and Expo.  Aside from meeting a number of great people from all over the country, I also learned quite a bit.  As a solo practitioner, my goal is to spend as much of my time as possible serving my clients, and as little time as possible dealing with the "administrative" side of running my practice.  I picked up quite a few tips here to help make that so.

Regular blogging on estate planning and related issues will resume next week.

PS.  I received my Internet ordered trust in the mail right before I left.

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This is the third article in a continuing series in which I order estate planning documents from an internet document service to see their quality.  When we last left our hero, I had just clicked on the link from the main page that said "Wills and Living Trusts," which took me to a page that gave me the following options:

Oy.  I understand that there is some confusion in the term "Living Will" because it has the word Will in it.  But my main complaint is and will continue to be is that it lets customers choose for themselves, without any discussion, thought, or review, what they need.  I like to sit down with my clients and go through all of the options and explain to them what each document does, and then discuss each one in terms of the larger picture of their estate planning.

I decide to learn more about Living Trusts.

It's not a bad explanation. However, it doesn't talk about who needs and who doesn't need a Living Trust.  And, it doesn't talk about the most important thing that you have to do with a Living Trust to avoid probate.  You have to fund it properly.  All of your assets have to be transferred into the Trust.  Another thing I learned is that the Service is nowhere near as cheap as I thought it was.  Here is their pricing for customers who decide that they need a living trust:

 So I decide I'll order a Living Trust.  Stay tuned.  Same Bat Time, Same Bat Blog.

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This isn't an "official" entry in my ongoing series, but just a quick update.  Yesterday I emailed the internet document company asking about the status of my documents.  Today I received an email telling me that, "as a courtesy" they are sending my PDF copies of my documents.  So I have them.

Still, I want to wait until I receive the actual paper documents before going forward.  I"m not 100% sure that they won't be changed, or that they will still get to me.  Also, I want to post pictures of how pretty they are, because if they are going to be wrong, they might as well look good.

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As I posted in my last post, I decided to go to an internet website that purports to provide wills and trusts (among other things), to see how good their service really is, and whether they are properly helping their customers. I will not say their name right now, except to say while their zip code is not 0-2-1-3-4, if you grew up watching TV in the 70s, it might have been.

The first thing I notice about their webpage is how "busy" it is. There are a lot of different options all over the place, and it's a bit confusing. The next thing that I notice is that the company advertises itself as as "Legal Document Service." Oy. As an Estate Planning Attorney, my job is not to provide "documents" to my clients. My job to provide them with advice. There is a reason that attorneys are often referred to as Counselors. Before I sit down with a client for the first time, They don't, or shouldn't, already know what they need. For every new client that I have, before drafting any documents, I sit down with the client and interview them. I ask them extensive and sometimes intrusive questions about their family and finances. I would be committing legal malpractice if I didn't. It isn't until the end of the interview that I discuss with the client what legal documents, that in my opinion that the client needs. This company, as a "Legal Document Service" provides its customers with legal documents that the customers choose for themselves.

I see the link for "Wills & Living Trusts," click and jump in.

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I keep hearing from people what a great "deal" a certain internet website is. You just log on, type your information, and you can instantly get wills, trusts, corporations, trademarks, etc, just as good as one prepared by an Estate Planning or other Attorney for a lot less money. As I posted before, I believe that this is impossible. No computerized website can ever give you the personal and customized attention that an Estate Planning Attorney can. It does not know how to ask the right questions and come up with the right solutions based upon your individual circumstances.

"But", someone will say, "You've never ever seen a document from them. For all you know, they're perfect."

Fair enough.

So I decided to see for myself. I went to this site, signed up, and ordered a revocable living trust. I even paid for it. I answered the questions, went through the whole process and filled out the information as if I were a client (of course, I didn't use any real attorney client information). Over the coming days, I will write about my experience in using the site, signing up, answering the questions, and the documents that I receive.

When the document arrives in the mail, I will read it and post my thoughts about it. I'm going in with a skeptical mind and am biased, but I'm prepared to be swayed. I actually hope I'm wrong because it bothers me greatly that there are so many people out there who have "peace of mind" in the belief that they've done their estate planning, and have what may be faulty documents.

In my coming reviews, whenever I profoundly disapprove of something that the site is doing, I will indicate it to you by invoking something my Grandmother always says:

Oy.

Be prepared, there are a lot of Oys coming, regarding just using the site, and I don't even have the documents yet.

[Note: While I'm sure you can figure out who it is, I purposely didn't mention the site at this time. I don't want to influence the experiment.]

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This post concerns what I see are the dangers of people buying fill in the blank Wills in stores, over the internet, or using consumer software.  And I am going to admit right up front that I have a personal and financial bias.  My job is to provide estate planning services, which may include wills, trusts, advanced directives and other documents, to clients.  Like anyone else who works for a living, I certainly prefer that people hire me and not someone else.  If instead of going to me, people buy software that purports to prepare Wills, or they buy a Will from a company that constantly advertises on the radio, then I am not benefiting financially.

But this post isn't about that at all.  If a client chooses to hire an attorney other than me then I'm not making money either, yet that does not bother me.  What bothers estate planning attorneys about store bought fill in the blanks wills and trusts, or software, or internet Wills, is that they often end in disaster.  Virtually every estate planning attorney has more than one story about a bereaved family finding out after their loved one's death that the do it yourself Will did not accomplish what it was supposed to, or wasn't properly executed and therefore was invalid.

My main concerns with do it yourself estate planning are as follows:

1. People are choosing what they need without professional advice.  Someone will get into their mind that they "need a trust" and will go onto the internet and order one.  It would be like if I woke up one morning with a stomachache and without going to the doctor decided that I needed an appendectomy.  A person needs to sit with an expert to decide whether they need a trust, and what kind, and what it should say.  And even if the person does need a trust, it still has to be properly funded, something a form can't do.
2. The "one size fits all" problem.  A fill in the blank form bought in a store or ordered over the internet is not going to be custom tailored to an individual client's needs.  Every person has their own special set of circumstances, whether it is the type of assets they own, or special provisions that might be necessary for their children.  Just one example, if you are in Florida and you own a home, the rules regarding how you may devise your Homestead are extremely complex. No preset form, or company in another state can possibly get it right, because there are too many variables, and every situation is different.
3. The Law is constantly changing.  How often are these forms updated to reflect changes in the law?  Can you have confidence that the document is valid for your state?
4. People who buy premade Wills often do not execute them properly causing the Will to be invalid.  The law regarding the execution of Wills is very strict and unforgiving.  In Florida, a testator must execute his Will in the presence of two witnesses who also must sign in the presence of each other.  There are numerous cases of Wills being declared invalid because the signing requirements were not adhered to.  If a Will is invalid then the estate passes through intestacy. An estate planning attorney is likely to have presided over the execution of hundreds, if not thousands, of Wills and will have a procedure to ensure that each and every Will is properly executed.

I understand why people buy store bought Wills or software instead of going to an attorney.  Money and time.  They see an attorney as far too expensive, and probably don't really understand what an estate planning attorney truly does.  They think the $39.95 form or $49.95 software will be "good enough." 

If time and money are the motivating factors, then you should know that it is much more expensive and it takes a lot longer to fix the mistakes after you are dead than it would have been to do it right the first time.  A Probate, especially one complicated by a Will with errors or that is invalid, will most likely cost at least 3 times as much as proper planning would have.

I'm not saying that the software, forms, or internet wills will always be invalid.  I'm just saying think of your family, and be careful.  Like anything else, there is no substitute for personalized one on one advice.

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