Do-It-Yourself (“DIY”) estate planning is enjoying a bit of popularity right now, especially with the economy being so rough. This is only natural; after all, who doesn’t want to save a buck wherever they can? Saving money is understandable, even laudable, but trying to do it with your estate plan is just asking for trouble.
Imagine that a relative of yours needs to have a complex surgery performed, and that the outcome of that surgery would determine whether that relative’s family will be taken care of financially. What do you think that family’s odds are if you were to decide that, because of the costs associated with a surgeon, you would go out, buy a used surgical text and anatomy chart, and then perform the surgery yourself? If you’re thinking that such a decision would be crazy, you’d be right. The problem is that putting together an effective and comprehensive estate plan, which accounts for the ever-changing tax laws, is just as crazy. Nevertheless, people still think that they can read a DIY book and then run out to perform estate surgery.
One big problem with DIY estate planning is the degree to which it uses standard, fill-in-the-blank forms. When it comes to estate plans, one size does not fit all. Each person’s goals and assets will be different from the next; so, too, should the structure of their estate plans.
Another problem occurs where people grant too much power to another. They use a power of attorney they don’t fully understand and wind up getting burned.