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The Pitfalls of Do It Yourself Planning

What you need to know before downloading that form.

By Susie Germany, Esq.

When clients ask us why they should hire us to prepare their estate plan instead of downloading a form off the internet or attending a large group seminar and doing fill-in-the blank forms, I often respond with another question like “would you perform surgery on your foot yourself to save a few hundred dollars? Or repair your car yourself if you knew nothing about mechanics?”

Everyone wants to make wise financial decisions. However, preparing your will and other planning documents yourself may very well be penny-wise and pound­foolish.

In the interest of full disclosure, yes, attorneys earn fees for preparing estate plans. However, they earn much more money when litigating will contests, trust litigation or breach of fiduciary duty cases for abuse of power of attorney. So, although on its face, the opinion of the author does have some self-interest, there are many misconceptions about do-it-yourself estate planning documents downloaded off the internet, or prepared in a group setting.

In fact, when I teach classes for members of the public about estate planning, I frequently mention that in a room with 50 people in it, if properly drafted and customized, many of the attendee’s estate planning documents will look very different. Due to different family backgrounds, needs, financial situations and other factors, almost every one of those people will have very unique planning documents.

So what is the purpose of do-it-yourself estate planning documents? They are readily available and can be purchased very reasonably. A lot of people ask us if they are effective. The answer is, it depends …

Attorneys are not just document drafters. They are also counselors at law. Our job is to explain the pros and cons of documents that have a legal effect on a client’s life. The saying “you don’t know what you don’t know” is really applicable here.

People sign legal forms that are downloaded off websites every day. But how many of those people truly understand what they signing, or the power they are giving to another person? With upswings in elder fraud and elder exploitation since 2008, we have seen more incidences of power of attorney abuse and will contests. This is, in some part, due to the fact potential exploiters and abusers have easy access to these planning forms and can print them off and put them in front of unsuspecting parents or grandparents, who may have dementia or other cognitive impairment, or simply do not understand the consequences of signing these documents. Some of the worst cases our office has seen over the years have involved grandparents unwittingly signing deeds transferring their homes over, or putting a child or grandchild on their bank account, and being financially wiped out.

Another common issue we see occurs when people attend an estate planning seminar and they are given fill-in-the-blank wills or powers of attorney to complete. Often, these documents may not be specific to Colorado law, may have ambiguous language, do not account for unforeseen circumstances such as divorce or your children predeceasing you, may not be properly executed or witnessed or there are important pieces missing from the document. We also see improper planning, as the client has a unique situation, such as a child with special needs, and that child is either completely left out of the planning or gifted to, which can impact their future eligibility for public benefits.

The main issue to remember is do not sign anything unless you fully understand it. If in question, see an experienced elder law or estate planning attorney who comes recommended to you and focuses their practice in these areas of law. It may involve some financial investment to have quality documents prepared, but compared with the mistakes or problems that may occur if you don’t, it may be a small price to pay in the long run.

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