The Pitfalls of DIY Estate Planning: Why You May Need Professional Guidance

Ensuring that you have some form of an estate plan is important. Estate planning documents safeguard your wishes in the event of your incapacity or death, and there are endless DIY options that consumers can use to create their estate plan. While these options seem convenient, they may come with significant risks that could jeopardize or contradict your wishes. In this post, the estate planning attorneys of Thompson Legal will explore some of the dangers that can arise with DIY estate plans.

Please note that this post is not exhaustive, and every situation is unique. In the event that you have questions about your specific case, it’s advisable to speak with an attorney. Contact Thompson Legal to schedule a discovery call with a Michigan estate planning attorney.

Ambiguous Language

One of the most common error that arises in DIY estate planning documents is ambiguous language. The use of ambiguous terms and phrases can result to later confusion, misinterpretation, and unintended consequences. Without the expertise of an experienced estate planning attorney, you may inadvertently create provisions that are open to interpretation, leading to disputes among your beneficiaries.

Without clear directives, disagreements among your heirs may arise and require probate court intervention.  After expensive probate litigation, a judge may interpret your language differently.  The cost of litigating ambiguous language far exceeds the cost of having planned ahead with a comprehensive estate plan.

Internet Forms

Many individuals turn to internet forms or generic templates for their estate planning needs, assuming they provide an easy and cost-effective solution. However, given that these are one-size-fits-all forms, they often fail to account for the unique complexities of your situation and family dynamics. They also often do not comply with Michigan’s specific legal requirements or comply with changes in the law.  Both of these mistakes would require your loved to need the support of the probate court. 

Not Planning for Those with Special Needs

DIY estate planning tools often overlook those with unique needs - such as those with minor or disabled beneficiaries. Parents of young children should take extra care to nominate a preferred guardian for any minor children through their estate plan. It is important to note, however, that simple DIY documents will likely result in probate administration and a lump sum payment to beneficiaries. 

When a minor receives a large sum of assets, they are required to have those assets monitored through a conservatorship. This imposition of court supervision will make all distributions public records as well as delay beneficiaries’ access to any proceeds. For disabled parties, it may result in a beneficiary losing their entitlement to government benefits.  An experienced estate planning attorney can advise you on the best way to ensure your beneficiaries are cared for and protected.

Relying Solely on Beneficiary Designations

While beneficiary designations are a convenient way to transfer certain assets without probate, sometimes relying on them solely can be a mistake. When a party is listed as a “pay on death” beneficiary, there is no requirement to share or distribute those proceeds. DIY planners may overlook the implications of beneficiary designations on their overall estate plan, resulting in unintended distributions or conflicts with provisions outlined in their will or trust.

Failing to Plan for Taxes

The tax laws for estates and trusts are complex and always subject to change. DIY planners may miss out on valuable tax-saving opportunities or inadvertently trigger unintended tax consequences through poorly structured estate plans. DIY estate planners do have the benefit of gift and tax saving guidance, which could result in a significant portion of the estate being lost to unnecessary taxes.

Why Professional Guidance Matters

By working with an experienced estate planning attorney, you can avoid these pitfalls and create a comprehensive plan tailored to your unique needs and objectives. An attorney will ensure your documents comply with state laws, address all relevant considerations, and provide ongoing guidance to adapt your plan to life changes and legal developments.

Don’t leave your legacy to chance. Contact Thompson Legal today to speak with an attorney about securing your family's future with a professionally crafted estate plan.

This blog is for informational purposes only. It is not intended as legal advice. In the event you would like to speak with an estate planning attorney about your case Contact Us at (734) 743-1646 to schedule a consultation.