3 Risks of Do-It-Yourself Estate Planning

Establishing your estate plan is an important and serious undertaking. You should never attempt to create legal documents without assistance from a knowledgeable lawyer — and that’s especially true with estate planning documents.

Do-it-yourself estate planning has significant risks that can completely defeat your efforts to protect your family and yourself. There are three basic ways that DIY estate planning can go terribly wrong and cause substantial problems for you and your loved ones.

Risk #1. Your estate planning documents are not valid in Arizona.

Like every state, Arizona has specific laws that apply to individual documents in an estate plan. The statutes address the contents of documents and requirements for execution.

If you make a single simple mistake in creating an estate planning document like a Last Will and Testament, it could be completely invalid under Arizona law. The result is the same as if you had no will at all — state laws make all your decisions for you. Intestate succession laws determine distribution of your estate and also govern what happens if other future contingencies occur in your life. The outcome likely will not be entirely consistent with your wishes.

The validity of your documents is just one of the important reasons why it’s essential to talk with a knowledgeable estate planning attorney when you make an estate plan.

Risk #2. Your estate plan doesn’t fit your circumstances.

Estate planning is not a one-size-fits-all process. Every individual has unique personal and financial circumstances. Your estate plan should reflect your family circumstances and the nature of your assets.

Forms and online services don’t have a clue what your situation is. They may ask a limited number of questions, but simply cannot evaluate everything about you, your family, and your property. An estate planning attorney will learn everything about you and your finances before discussing your options for an estate plan that fits your specific circumstances.

Here are just a few of the many ways in which estate planning needs of individuals can vary with their circumstances:

• If your assets include an IRA or 401k, choosing the right estate planning treatment is essential for both taxation and asset protection
• If your family includes multiple generations, your estate plan should ensure that your legacy stays in the family and avoid family disharmony (and potential litigation) to the greatest extent possible.
• If you own a business, you have options for how to treat it in your estate plan. A lawyer helps you choose the best option for your circumstances.
• If you have a blended family, you face special concerns and challenges that should be addressed in your estate plan.
• If avoiding probate is one of your estate planning goals, you may think that you need to create a trust to do accomplish that goal. In fact, there are other ways to avoid probate in Arizona that your lawyer can explain before you decide on the best approach for your estate plan.

If you create a DIY estate plan that doesn’t fit your situation or is not the best way to address your circumstances, you could be creating significant tax, estate, or other problems for your family. Worst of all, your heirs may not end up benefiting from your legacy to the extent they could with the right estate plan. In other words, the few dollars you saved by doing it yourself could ultimately cost you (or your loved ones) a lot more.

Risk #3. Your estate plan is not complete — or doesn’t accomplish what you think it does.

Estate planning is the method for addressing future expected or unexpected contingencies in your life. A thorough, complete estate plan addresses a wide range of possibilities. Some are common to many people. Others are unique to you and your circumstances.

If you go the DIY route, you might think your plan covers all contingencies, when in fact it does not. It’s hard to anticipate everything that might happen in the future. Your estate planning lawyer is professionally trained to ensure that your estate plan covers all the contingencies that may affect you and your family during your life and afterward. Most likely, an online service won’t be able to do that for you.

In addition to the possibility of having an incomplete plan, choosing to do it yourself can result in having an estate plan that doesn’t accomplish what you think it does. Arizona laws can affect interpretation of estate planning documents — and those laws change over time. So do federal tax laws. Your lawyer makes certain that your plan accomplishes your goals under current laws and alerts you when changes affect your estate plan.

Another problem with the DIY approach to estate planning is that it’s very possible for you to end up with inconsistent documents that create problems for your heirs and prevent your goals from being accomplished. When you get help from an experienced estate planning attorney, you can rest assured that all your documents consistently carry out your wishes and goals and provide the right approach for you, your family, and your circumstances.

Schedule a Free Consultation With an Experienced East Valley Estate Planning Attorney

At Peterson Law Offices, estate planning is a primary focus of our practice. We provide top-quality services at affordable prices. If you don’t have an estate plan, we help you put one in place that fully addresses your goals and circumstances. If you already have an estate plan, we can help with updating your plan or reviewing it to make sure it is current.

We welcome inquiries from clients throughout the East Valley, including Queen Creek, San Tan Valley, Gilbert, Mesa, and Chandler. Schedule your free initial consultation by calling 480-878-5998 or using our online contact form.