Wednesday, July 8, 2009

The pitfalls of do it yourself legal documents

Given the collapse of my beloved New York Mets, I haven't spent much time recently listening to WFAN. Scrolling the radio dial the other day, I came across Rush Limbaugh doing a commercial for For the uninitiated, LegalZoom allows people to create their own legal documents on-line.

In the ad, Rush describes how a friend told him that they created their own living trust at Legalzoom, and that the document looked almost identical to one prepared by a lawyer for another friend, but at a much higher cost. Sounds like a no-brainer, right?

Well, if all the lawyer did for the "other friend" was a "word processed" trust using a fill-in-the blanks structure, then the client did in fact overpay. But any estate planning attorney worth his or her salt will take the time to learn about the client's family -- the kids, grand kids, other family members, and what are the clients hopes, dreams and aspirations during their own lifetimes and the lives of their loved-ones.

We discuss with our clients the benefits of leaving assets in protective trusts for their children's lifetimes, which will protect the kids' inheritance from their "creditors and predators," including a divorcing spouse. Properly structured, such trusts can provide the child with access to the trust income and principal when needed. In my view, there is no real benefit to the traditional "outright" distribution of assets.

Also, we make sure that the clients' living trusts are funded with the clients' assets during their lifetimes; in fact, we have a full time "funding coordinator" on staff.

Finally, our practice features an ongoing annual maintenance program to ensure that our clients' estate plans stay current with the changes in their lives, changes in the law, and changes in our knowledge and experience.

Will our "up front" cost be greater than Legalzoom or the like? Well, sure. But an experienced and knowledgeable estate planning attorney can bring wisdom and guidance to the estate planning process that no computer program can come close to matching. And, when you factor in the costs of "death settlement" of an estate, the costs of the "inexpensive" planning compared to our comprehensive approach will, more than likely, no longer seem to be such a bargain.

In my view, on-line estate planning is suitable for those people who would never do any planning if they had to go see a lawyer. But for those who are serious about preparing a comprehensive and ultimately effective estate plan, there is no substitute for seeking appropriate counsel.

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