Buyer Beware: Online Wills, Trusts, and Estate Planning

An increasing number of websites advertise that they will sell you online legal forms including wills, trusts, and power of attorney documents. Is simply downloading your estate planning documents from a website the latest modern convenience? Can clicking on a website buy peace of mind that your loved ones will be taken care of when you are gone? 

When you visit websites selling online legal documents, you will probably see advertisements claiming, “It will be easy! You will save money! You will have a valid legal document!”  At first glance, that sounds great. But it turns out that getting legal documents from a website is a lot like buying a used car from a salesman with only a few cars on the lot. If you walked onto a used car lot and saw big signs advertising their great deals and the quality of their cars, you probably wouldn’t just take their word for it. You might want to look at the options, compare the prices, and do a test drive before handing over your credit card.  

Let’s take a closer look at the claims of DIY websites offering online estate planning.  

Claim #1: It will be easy! 

Reality: It might seem easy to click through some questions and generate a legal document, but websites often use short cuts rather than provide you with all the relevant information. 

Whether you go to a DIY website or an experienced attorney, the first step is deciding what you need. Should you have a basic will? A will with a testamentary trust? An irrevocable trust? A living trust? Should you have special provisions for pets or stepchildren or long-term care needs? Are there any tax implications? 

Most people who visit us at Hillsborough Wills and Trusts, don’t know exactly what legal tools they need to accomplish their goals. Discussing their unique situation and teaching them about their options is an essential part of the estate planning process. In fact, it is so important for people to have a clear understanding of their legal options that, in North Carolina, a lawyer is licensed as an “attorney and counselor-at-law,” and the North Carolina Rules of Professional Conduct require lawyers to act as counselors offering information and guidance to their clients.  

The basic packages on websites with online legal documents eliminate this step almost entirely. Rather than receiving the counsel of an experienced attorney, you will get a one-size-fits-all questionnaire. Providing a questionnaire makes the process seem easy because people think, “I will just answer the questions. How hard could it be?”   

The problem is that most people don’t know what they don’t know. The answers to the questionnaires are not always intuitive, and inadvertently answering the questions incorrectly will likely create a legal document that does not achieve your goals. To be fair, many websites will have pages of fine print providing explanations of the legal issues behind each question. It’s important to read and understand the pages of fine print, but, if you do, the websites no longer seem particularly easy or hassle-free.  

Here's an actual example from a well-known website illustrating how easy it is to make mistakes with online legal documents. The website allows you to create a Power of Attorney document to name someone who can help manage your financial resources while you are alive. The website’s questionnaire asks if you want the document to take effect immediately or to take effect only when you are incapacitated.  If you are like most people, you might assume that the document should only take effect if you are incapacitated. 

However, experienced attorneys usually give the opposite advice. It used to be common to create Power of Attorney documents that become effective only if a person is incapacitated. But that approach proved to be ineffective and burdensome since it required people to get doctor’s appointments and verification of incapacity before their agent could do even simple tasks like paying bills or arranging for care. The current advice is to name someone you trust and have the document be effective immediately so that your agent can help you whenever you need it (e.g., if you are in the hospital or out of the country or only need help occasionally) – not only if they obtain formal verification that you lack capacity.   

Here’s another example of how using online documents might lead to mistakes. One of the major websites offering online estate planning allows you to list co-executors for your will. Having two people serve as co-executors might sound like a convenient way to spread responsibility. But experienced attorneys would almost certainly advise you that having co-executors is a recipe for conflict and delays during probate.  

Imagine that you are 16 years old and arriving at the used car lot to buy your first car. Instead of discussing your preferences, commuting habits, size of your family, etc. to help decide what type of car is best for you, the salesman just hands you a questionnaire: “Do you want 200 or 500 horsepower?” A lot of people might shrug and pick 500 horsepower because it sounds more powerful, not realizing that it might make the car less fuel efficient and probably isn’t necessary unless they plan on speeding along a racetrack. In fact, if you are in stop-and-go-traffic or interested in hauling a camper, it might be more important to consider the car’s torque rather than its horsepower. But you don’t know what you don’t know, so you just pick something that you hope will work or take whatever the salesman has on the lot.  

Claim #2: You will save money! 

Reality: You get what you pay for. 

First, online legal documents do not always turn out to be much less expensive than working with an in-person attorney. Not surprisingly, the advertised prices on the websites tend to be for the most basic will. If you want special provisions for your pets or minor children or need a trust or want to speak with an attorney, there are usually additional fees. Very often you will end up paying to speak with an attorney from the website. But consider the caliber of the website attorney on the other end of the phone. Have you read any reviews from real people about the specific attorney you are now depending on? And consultations with the website attorney are often limited to 30 minutes, which is rarely enough time to thoroughly discuss someone’s situation and fully answer their questions.  

Second, even if the documents are cheaper, they usually don’t save money in the long run. It’s not uncommon for someone to “save money” getting online legal documents and then end up in an attorney’s office to “do it right this time.” When it comes to setting up your estate planning, taking short cuts can cost your family thousands of dollars in unnecessary taxes, court costs, and hassles after you are gone.  

When weighing the costs of online documents versus an in-person attorney, it can be helpful to consider what you are getting for your money and what you are giving up.  

For example, the websites do NOT give you completed legal documents. They will send you the documents, and it is up to you to have them executed. Sounds simple? Improper execution is one of the most common reasons that wills are invalidated. Make sure you know how many witnesses you need, who can be a witness, which documents need a notary, etc. At Hillsborough Wills and Trusts, all of your documents will be correctly signed, witnessed, and notarized before you leave. 

Furthermore, most websites will NOT put your resources into a trust. Usually, they will generate a trust document, and it will be up to you to fund your trust.  A trust is like a treasure chest where you can place your resources to make it easier for your family to find and distribute them. But it is only helpful if you actually put your resources into the trust. This is called funding the trust and usually involves re-deeding property and retitling accounts into the name of the trust. If you do not properly fund the trust, then all you have is an empty box that will not provide any of the benefits you thought you paid for. When you work with an experienced attorney, they will be able to help you fund your trust, re-deed your property, and give you specific funding instructions.  

Perhaps most importantly, the websites do NOT give you a relationship with an attorney. At Hillsborough Wills & Trusts, we believe that strong legal documents are important, and a strong relationship with your attorney is also important. Not only do we provide guidance to determine which legal documents are best for your unique situation, we continue to be there for our clients long after the legal documents are executed. We will work with you over the years to make updates; we will give you referrals to local services such as accountants and long-term care providers; and we will be there for your family if they have questions when handling your estate.  

Claim #3: You will have a valid legal document! 

Reality: A legal document can be valid and also be useless.  

In the law, validity is a bare minimum requirement. It just means the document was constructed in accordance with state specific rules. It does not guarantee that the document is useful or appropriate.  

Of course, there are times when the bare minimum might be better than nothing at all. Someone who is actively dying without a will could benefit from quickly printing a will from a website, especially if that person needs to name guardians for their minor children. If a quick will or power of attorney document is all someone can afford, then it is great to know that online documents are available.  

Just understand that when websites advertise that legal documents will be valid in your state, it is like a used car salesman boasting that all the cars on the lot are guaranteed to run. It sounds reassuring at first, but a savvy shopper will realize that having a car that turns on is not enough. Does the car have working heating and air conditioning? Does it have airbags that will deploy when you need them?  

Consider whether you have the ability to spend a little more time or pay a little more money to fully understand your options and drive off knowing your car is safe, reliable, and custom-designed to meet your needs.  

When it comes to DIY websites, taking the time to think closely about their claims will help you make an informed decision, so you have peace of mind knowing that you have done the best you can for your loved ones.  

 As you navigate these big decisions, remember that the team at Hillsborough Wills & Trusts has the expertise to help you Build Your Circle of Security.

Call us today at 919-245-8440 or contact us at: https://hillsboroughwills.com/contact.