Pitfalls of DIY Trust And Estate Planning Documents

• June 3, 2024
• CLLB Law
• Estate & Elder Law

Featured Snippet: The drawbacks of DIY trust and estate planning documents include inconsistencies, lack of flexibility, asset omissions, vague provisions, and they may not follow the laws of your home state. In addition, they lack proper consideration for future challenges and opportunities. 

We live in a fast-paced digital world where we prefer that many tasks be done quickly. However, the consequences of downloading online forms and templates for trust and estate planning outweigh the speed and convenience it offers. Without a thorough approach and the guidance of a professional, DIY trust and estate planning documents can cause legal complications which, in the future, may cause you the loss of a considerable amount of time and money.  The financial loss, conflicts, and emotional stress for the involved parties can be devastating.

This article examines the most prominent pitfalls of DIY trust and estate planning documents.

What Are DIY Trust And Estate Planning Documents?

DIY (Do-It-Yourself) trust and estate planning tools are intended to direct how your assets will be managed and distributed. This involves creating a set of legal documents that should remain valid during and after your lifetime. Common examples of these DIY estate planning documents include wills, trusts and powers of attorney.  Many templates for these forms can be downloaded from the internet.

Common Pitfalls of DIY Trust And Estate Planning Documents

The cost-effectiveness and speed of adopting a DIY approach to creating these important documents may seem appealing. However, while the DIY sites allow you to quickly generate documents, this comes with significant danger.

Here are common disadvantages associated with DIY trust and estate planning documents to keep in mind:

Inaccurate Online Forms

A common approach to creating DIY estate planning and trust documents is downloading and tweaking online forms and templates to suit your needs. This could seemingly be a fast method of getting things done. Yet, it comes with inadequacies that may confuse the parties involved or ultimately invalidate your documents.

For instance, each state has unique laws associated with estate planning, and a generic online template may not take these into consideration. Inappropriate use of terminology and inaccurate or insufficient information can cause major complications for the parties involved resulting in unforeseen taxes, costs, and unenforceable provisions.

Therefore, it’s vital to collaborate with competent trust and estate planning lawyers to avoid disappointment with DIY solutions. 

Rigid Documentation

Creating effective estate planning documents is an ongoing process that should account for major life changes. As such, they should be adjusted when necessary to reflect significant events like major illnesses, incapacity, marriage, childbirth, and divorce. Unfortunately, however, many DIY documents are static and don’t account for changing life circumstances. As a result, they could trigger confusion and misunderstandings among involved parties.

Moreover, their inability to accommodate changes may lead to inadequate documentation and improper allocation of assets. It’s best to seek the services of a professional when you need powers of attorney, trust and estate planning documents, to avoid this pitfall.

Error-Ridden Documents

Trust and estate planning online forms and templates are often generated with tools that may not catch errors and inconsistencies. As a non-professional, it may be challenging for you to identify many of these mistakes, leading to the creation of non-enforceable documents.

It’s vital to work with competent estate planning lawyers who can identify and eliminate errors in your documents. They may also monitor the execution process and ensure the details are implemented effectively to avoid the disappointment associated with DIY estate documents.

Asset Omission

DIY trust and estate planning documents lack the painstaking approach of a professional plan. Their simplicity results in the possibility that some assets could be omitted.

Moreover, many DIYs lack flexibility and may not document changes as you acquire new assets. This may result in asset omission and beneficiaries’ inability to acquire the assets. If you have a dynamic and complicated asset portfolio, hiring experienced estate planning attorneys is crucial.

Lack of Proactive Planning

Professional estate planning lawyers possess extensive knowledge and experience in trust and estate planning and can anticipate future opportunities and difficulties and structure your document to accommodate them.

Conversely, you may fail to proactively plan for future circumstances when creating trust and estate plans, because you lack prior experience with the process. This may lead to major complications during unforeseen circumstances such as death, illness, or economic changes. Since the primary purpose of establishing trust and estate planning documents is to prepare for the future, it’s advisable to hire professionals to help you plan adequately.

Vague Provisions

DIY trust and estate planning documents are often generic, failing to tailor the details to your unique circumstance. As a result, they are incapable of fully capturing your expectations. They may also contain generic instructions and vague language that may lead to confusion among affected parties.

This makes the content of your plan ambiguous and susceptible to multiple interpretations that may not completely align with your wishes. Therefore, it’s best to avoid this pitfall by collaborating with a professional who ensures the details of your plans are clear, concise, and straightforward.

DIY vs. Professional Trust and Estate Planning Documents: Which Is The Best Option?

You wouldn’t go to a heart surgeon to fix your breaks. Likewise, you wouldn’t go to a mechanic if you’re having a heart attack. While DIYs may be a quick fix, they can be dangerous and are not the best option to create comprehensive, credible, and valid powers of attorney, trust or other estate planning documents. While they may seem to be an affordable option, they often come with hidden costs that are associated with quick schemes. This may include unforeseen tax burdens, legal hurdles, family conflicts, and invalidity of your plan due to their failure to adhere to your specific state laws.

Trust and estate planning documents are often written to help you achieve specific goals. For example, they’re necessary in facilitating long-term medical care plans or offering financial protection to your beneficiaries. However, DIY trust and estate planning documents’ one-size-fits-all approach prevents them from catering to your unique requirements.

Professional powers of attorney, trust and estate planning documents, on the other hand, are customized to suit your unique purposes. They are also detailed, error-free, and straightforward, eliminating the ambiguity and confusion that comes with DIY trust and estate planning documents. Work with an estate planning attorney to create documents that account for your personal and financial goals.

Contact Church Langdon Lopp Banet Law Firm for Professional Trust and Estate Planning

DIY may be a good approach for interior decorating or household repairs, but when it comes to highly critical matters, you need professionals to ensure everything goes as planned.

Providing financial security for your loved ones after you’re gone is too serious for trial and error. One misstep in the documentation process could have long-lasting and costly impacts. So, it’s crucial to partner with competent attorneys who have adequate knowledge and experience to ensure perfect documentation when handling trust and estate planning documents.

At Church Langdon Lopp Banet law firm, we are a team of estate planning legal professionals ready to guide you through the process. We’ll review your unique circumstances, understand your goals, and tailor the paperwork to your requirements.

Contact our team at (812) 513-1098 to get started.