Can I get by with an online Will or Trust?

Can you get by with an online estate plan? Probably, but the bet I will make with you is that it will not be as smooth or painless of an administration process for your loved ones when you pass away.

Why should you worry about that? Imagine the timing of having to use your Estate Plan. You have recently passed, everyone is in town gathered and sharing stories about you and the times you have spent together. In the back of one or two of their minds is the question, “I’m in charge of the Estate now, what do I need to do next and where do I start?” The lack of a clear and detailed plan will inhibit those in charge of your Estate from participating in the grieving process.

But, let’s back up a few paces and talk about the concerns I see when reviewing on line or program based estate plans.

·         Too often I am confronted with inconsistent, and even at times contradictory provisions. This is often due to the drafter’s lack of knowledge on how to properly construct a Will or Trust – and – because they do not fully understand the lingo (ie legal jargon) used in the documents.

o   Why should you care about this? If there is an inconsistency or contradictory statement/provision in your Will or Trust, often this will benefit one person, or group of people, to the detriment of another person, or group of people. Each side will easily justify that what you meant to say was the provision to benefit them, because that is what you would have wanted to do during your lifetime. See the problem here?

·         Often, clients are taken aback by the formality of the “signing ceremony.” There is a prescribed method and language that should be used during the signing of your Will or Trust, that is left to you to figure out if you do it yourself.

o   Why should you care about this? The primary purpose of the signing ceremony is to, as much as possible, protect your Estate Plan from being attacked, or challenged.

·         The last common concern I see is when clients come in with online Wills or Trusts, is the fallacy of the Reward being greater than the Risk. Another way of stating this it that the Reward (paying less to create your Estate Plan) outweighs the Risk (that your Estate Plan will somehow be less than effective).

o   Why should you care about this? When you create a Will, typically your goal is to provide guidance and eliminate quarreling among your family (generally children) when you pass away. If your Will has deficiencies in consistency or concurring provisions, there truly is no real guidance. In addition, this invites conflict.

Typically, one creates a Trust to avoid Probate. There are many other reasons to like a Trust, but this is often the primary reason in the State of Idaho. With a Trust, the process by which your property is transferred into the trust is called “funding.” Unless you change the ownership of your property, the primary advantage of your Trust will be lost, as failure to transfer assets into the Trust will result in Probate being required. So, unless the online service ensures that all real estate is deeded into the name of the Trust (and makes sure that the deed is actually recorded in the county recorder’s office), the online Trust will be fatally flawed.

Similar problems can occur if substantial bank accounts, stocks and bonds, motor vehicles, or other assets are not properly transferred into the Trust when it is created. Yet online services do not and cannot walk a person through that process.

Also, the transfer of your personal residence into the trust can jeopardize your homeowner’s property tax exemption unless an appropriate affidavit is recorded along with the deed. Yet online document services do not provide that affidavit and run the risk of costing its Idaho customers up to $1,500 per year in additional property taxes.