DIY Wills and Trusts Can Create DIY Problems
There is so much information out there on the internet. Some is accurate, some is misleading, and some is just flat out false. In the age of information, we have a host of information at our fingertips as not seen before at any point in our history. However, how do we tell the correct information from the false and misleading information?
The Age of DIY
In addition, we have a host of Do It Yourself (DIY) services that are becoming more available than ever before. We see this in the legal profession as well as other professions. I have seen websites that are available to file your trademark instantly, websites that allow you to invest money yourself without using a financial advisor and websites that allow you to purchase insurance instantly. We have all seen do it yourself tax return preparation, and in the legal profession, I have seen websites that allow you to create your Will or Trust instantly. These websites allow you to use a form (hopefully created by a lawyer) to write your own Will, Trust, and Power of Attorney.
In this day and age, I can see the benefit in using these DIY services, even for legal services. However, I would caution families before going the DIY route for their legal services, as you could be creating a DIY problem!
The Case of Ms. Aldrich
The State of Florida recently saw this first hand in the case of In Re: Estate of Aldrich. This case was decided by the Florida Supreme Court in 2014. In this case, Ms. Aldrich created her Last Will and Testament by downloading a form online. Ms. Aldrich left her assets to her sister and then to her brother, if her sister died before her.
In fact, Ms. Aldrich’s sister did die before her, and Ms. Aldrich did not update her Last Will and Testament. Unfortunately, Ms. Aldrich’s Will did not have a residuary clause. This is a clause in a Will that states where unnamed assets in your will are to go at your death. However, Ms. Aldrich did not speak with an attorney, so there was no way for her to know that this was in fact missing from her will.
The result of this was that Ms. Aldrich’s unnamed assets that she acquired after her Will was created passed according to Florida law and not according to her Will. Ultimately, these unnamed assets passed to her nieces, instead of her brother.
In the concurring opinion by Justice Barbara Pariente, she stated that she was reminded of the old adage “penny wise and pound foolish”, and that had Ms. Aldrich used an attorney to draw up her will, her brother likely would have received all the assets from her estate as she had intended when she wrote her will.
One can only imagine the legal fees that were involved to argue a case through the trial court, then through the court of appeals, and then finally to the Florida Supreme Court.
When planning to pass your estate to the next generation, the following is just a handful of issues that can arise, that you may not think of, when it comes to planning your estate:
- How will incapacity be determined and who will take possession of your assets and make decisions on your behalf
- Who do you wish to inherit from your estate?
- Would it bother you if you left all of your assets to your spouse, he or she got remarried, and left all the assets to the new spouse and not to your children?
- Would it bother you to have your estate administered through the public process called probate?
- Would it bother you to have your estate reduced by taxes including income and capital gains taxes?
- Is your estate subject to the generation skipping transfer tax?
- Would it bother you if your children had to hire an attorney and wait a minimum of 4 months to two years or longer before gaining access to their inheritance?
- Would it bother you if your children lost their inheritance due to divorcing spouses, creditor claims, lawsuits, other predators, and bankruptcy?
- Would it bother you if your children spent through their IRA inside the average time of 17 months, when you could have planned for them to receive the stretch-out of the IRA to potentially millions of dollars over their lifetime?
- Would it bother you if all the money you spent a lifetime saving was spent on your long-term care costs in the final years of your life?
- Is your estate setup in the appropriate manner to avoid multiple different ancillary probate administrations?
- Are your beneficiary designations updated and filled out in the correct manner to avoid unnecessary court intervention including guardianship/conservatorship proceedings and in the most tax efficient manner for your children and loved ones?
For More Information
I could go on, and on, and on of all the different legal issues that affect planning a family’s estate that they simply fail to think about.
If you have questions about estate planning and the correct (and necessary) legal protections for you and your family, then please contact our office at (513) 241-0400 or use the contact form available on this website to schedule a time to meet with one of our Estate Planning Attorneys. We look forward to hearing from you!