A great deal can be said about the concept of DIY estate planning. One thing that immediately comes to mind is the matter of choice. There are many different tools in the estate planning toolkit. The right document for one family may not be right for the next, and in fact, a well constructed estate plan can include multiple different asset transfer vehicles.
Are you sure that you know what documents you should use? For example, you may automatically think that you should use a last will to state your final wishes. This can be a suitable choice for some people, but there are other options, and there are limitations and drawbacks that come into play if you use a last will.
For one thing, if you leave lump sum direct inheritances to your loved ones through the terms of a will, they could burn through their inheritances quickly and have nothing left to fall back on later on. Plus, there would be no estate tax efficiency or asset protection.
Thirdly, a will must be admitted to probate, and this process is time-consuming. The heirs do not receive their inheritances while the estate is being probated by the court.
These are a few of the drawbacks and limitations, but there are others. If you were to use a revocable living trust as your vehicle of asset transfer, you would not face these pitfalls.
This is just one option, but there are other types of trusts that can be used to satisfy specific, advanced estate planning objectives.
Consumer Reports Recommendation
Even if a last will was the right estate planning document for you, DIY estate planning may not be the right way to go. Consumer Reports has advised against downloads and worksheets that you can obtain online.
Three legal professors that were engaged by the magazine examined last wills that were created using online resources that are sold by three different purveyors of DIY legal documents. They found problems with the documents, and they said that unintended consequences could come about if you try to go it alone using these downloads and worksheets.
Free Report on Do-It Yourself Estate Planning
We have provided some food for thought in this brief blog post. If you would like to dig a bit deeper, download our special report on DIY estate planning. This report is free, and you can access your copy here: DIY Estate Planning Report.
Visit Us at Forbes.com
Forbes.com is a highly respected source of financial information. We are regular contributors, and you can build on your knowledge if you visit this page: Forbes Contributor Mark Eghrari.
- Should I Tell My Loved Ones the Details of My Estate Plan? - November 23, 2022
- Protecting Assets with an Intentionally Defective Grantor Trust - November 16, 2022
- How to Keep Your Estate Plan Private - November 9, 2022