Now that you understand the basic components of an estate plan, you might be a little overwhelmed and uncertain about what to do next. Perhaps you have friends who met with an attorney to create their plans, while others swear by do-it-yourself (DIY) docs they found online. You may not be sure what the right choice is for you.
Deciding whether to use an attorney for your estate plan is a little like choosing whether to use a tax professional to file your taxes. The deciding factor on whether or not to use a professional should be:
How simple or complex are my financial and family situations?
Note that the question is NOT "How big is my estate?" Size of an estate has very little to do with whether you need to use an attorney. Even if your only assets are a house and one bank account, if you have a complex situation then you will most likely need to use an attorney. Complex situations when talking about estate planning are things such as:
- Divorce and remarriage.
- A family-owned business.
- Assets owned in multiple states.
DIY for the basics?
Let's say you feel like your situation is pretty simple. How simple would it need to be for you to feel comfortable using an online DIY will or other estate planning document forms? Consumer Reports tested several will-writing products and concluded that they were best used when "a very simple plan was required, such as one that leaves everything to a spouse with no other provisions." This means that if you want to divide up assets between two or more people or you have a more complicated situation, a DIY document might not be right for you.
If you do feel like DIY is the right way to go for you, be sure you use a product or form that has been created and approved by an attorney. State-specific documents are even better, as laws vary from state to state. And you might want to consider asking an attorney to review the documents you have put together, to make sure they are legally valid.
Some guidance for those on the fence
But what if you aren't sure whether your financial or family situations warrant something more advanced than a simple will, beneficiary designation forms and powers of attorney documents? The fact that you are questioning what should be part of your plan is a great sign, because it means you understand the importance of putting together the right documents. It also means that you should consult with an attorney, who can talk to you about the best way to create your legacy.
An attorney will be able to help you decide whether you and your family might benefit from a trust and what type of trust you should consider using to minimize costs and maximize what is passed on to your loved ones.
The bottom line
Although DIY documents may work for a few people with very basic estate planning needs, you may need to use an attorney who fully understands the laws and the entire process. An attorney will help you look at the big picture and ensure that things won't fall through the cracks.
Because although you might think that using online document templates will save you money, that choice could cost your estate and your beneficiaries quite a bit down the road if the documents end up containing mistakes that make them invalid.
