1) Actual Legal Knowledge
What kind of power of appointment should you include? Should you include provisions for an administrative trust, or a trust protector? What about a resulting common trust for your children? Which marital funding option should you use upon the death of the first spouse? How should you balance the desire for asset protection for the surviving spouse, with a step-up in basis for the trust assets? Should you name your trust as the beneficiary of your life insurance policy? These are questions that generally cannot (and should not) be answered by laypeople, but are integral to the trust drafting process. Lawyers are required to attend three years of law school, pass the bar, and generally take on a clerkship or internship prior to actually practicing law. The answers to these questions are heavily dependent on a client’s specific estate and personal information, and should be analyzed and assessed by a professional on a case-by-case basis. Just as you would not want to do your own brain surgery, you should not conduct your own estate planning.
2) Peace of Mind for a Good Product
Online sites go to great lengths to disclaim any guarantees that the information or products provided are correct or complete. In other words, if what you get is not what you thought you were getting, or is defective, you have no recourse. Attorneys, on the other hand, are held strictly accountable by law. In California, for instance, attorneys are required to attend mediation if a client feels they have been unjustly charged for the services they were provided. This avoids the time, cost and necessity of a client filing an actual lawsuit for breach of contract. Further, a client can contact the state bar association, who will investigate the issue at no cost to the client. An attorney can lose their license if they fail to abide by certain ethics and legal prescriptions. By working with an attorney face to face, you are assured both personal attention and personal responsibility.
3) A Trust that Fits Your Needs
Using online sites constrains your ability to draft a trust that is tailored to your needs. These websites necessarily use basic templates which are suited to a fictional composite of American consumers, and which cannot be modified by a layman without causing internal drafting errors. As a result, customers are stuck with pre-approved, generic trusts or wills which are not tailored to account for the specifics of a person’s estate (both in terms of size and composition), personal financial plans, family financial goals, age and health of the client(s), marital status and history, family composition, or family dynamics.
4) Privacy of Your Information
An attorney in California would be subject to serious sanctions by the State Bar, and could potentially be disbarred, for using a client’s information in such a way
5) Trust Funding
Generally, online sites (as well as some legal document services) do not “fund” (transfer your assets to) your trust. Having a trust will do you little good if there is nothing in the trust, and your assets have to go through probate. Funding your trust includes preparing and recording ACCURATE deeds, changing the name of your accounts to the proper trust name, assigning business or resource interests to your trust, and assigning all personal property to your trust. It may also be appropriate to designate the trust as the beneficiary for your retirement account or life insurance policy. These websites do not and cannot tell you how to do this for each, specific asset (each deed, each account, and each beneficiary designation is different), nor do they ensure you have done so properly. Failing to transfer an asset to your trust may result in probate or an alternative probate proceeding, such as Heggstad petition.
6) Attorney-Client Privilege
Communications between you and online legal providers are generally not protected by the attorney-client privilege, nor as attorney work product. This is particularly relevant in the context of divorce or lawsuit – the financial information given to these providers could potentially be subpoenaed and used against you. Not so with an actual attorney.
7) Revocation of Other Documents
If you have prior estate planning documents, including a will or power of attorney, you will need to effectively revoke and/or restate them in order to avoid confusion of active estate planning documents, and/or titling issues, which could result in probate and/or litigation between your heirs. Online legal providers generally do not address or resolve this issue.
8) Synthesis with Other Estate Planning Documents
A trust should be accompanied by a pour-over will, in the event assets are subsequently obtained and inadvertently not transferred to the trust. Additionally, the client should coordinate all of their estate planning documents to avoid confusion as to authority, and to avoid inconsistent provisions: the client’s Trust, Will, Power of Attorney, Health Care Power of Attorney, and HIPAA Waivers should all work together, toward one common goal.
9) These Providers May Charge Less for Trusts, but Make Up for it in Other Ways
Many of these providers charge hidden fees for services or products the customers never wanted, and never knowingly agreed to. Several providers will also charge customers for court documents, the majority of which can be obtained for free from the relevant court’s own website. And as stated above, effective estate planning requires coordination of several documents; online providers will charge you for each document, as well as for services such as “expedited” products. Additionally, if you sign up for a monthly subscription for one of their services and subsequently decide to cancel, be prepared for some resistance, and possible continued charges. Attorneys are required to provide transparency regarding their fees, and most estate plans are done on a flat fee basis, so you know exactly what you’re going to be paying, and you pay for it only once.
Many online websites specifically and explicitly states that information provided is NOT “legal advice.” Some go as far to concede that its services are not substitutes for the advice of an attorney. So if you’re not getting legal advice or products, what are you getting