I’ve wanted to address this topic
for some time, as it’s kind of a hot-button issue, but I’ve been putting it off
probably for that very reason. I
had an experience this week that pushed me off the fence and into the blogosphere
about it.
One of my many quirks is that I
love to listen podcasts, my favorite of which is “The Joe Rogan
Experience.” I listen to every
single Joe Rogan podcast and have them automatically downloaded to my phone
when new ones are released. This
week, while running through his sponsors at the start of the show, Joe did a
promotional bit for one of the podcast sponsors, an online legal document
website, in which he mentions how said website can help you create a will and
other estate planning documents quickly and cheaply. You've probably heard similar promos on the radio. In mentioning the reasons why one should use this website to
create a will or trust, the discussion quickly turned toward estate taxes that
can be imposed on amounts to be inherited. First, this is not an indictment of Joe or his guest, as it’s
not specifically stated by Joe or the guest that creating a will through the
aforementioned website will eliminate or minimize any estate tax liability, but
it would be very easy for a listener unfamiliar with estate and tax laws to
infer that from the conversation.
I was yelling back at the car stereo at this point, as I wanted to
interject a disclaimer warning listeners that simply creating a Will doesn’t
necessarily affect your estate tax liability. Because no one, except my kids in their car-seats behind me,
could hear me, I’m going to posit my comments in written form here:
11. The
federal estate tax typically only affects estates in excess of $5,340,000.00
(in 2014), and in Indiana there is no longer a separate state inheritance
tax. Some states still have
additional estate or inheritance taxes, but it’s still an incorrect inference
to take from the discussion that a Will automatically shields you or your loved
ones from that liability if it exists.
If you do have an estate large enough to get
hit by the federal estate tax, the tax rates can be as much as 40% on the
amount to be inherited. I’m
terrified by the idea of someone with an estate potentially large enough to be
dealing with estate tax liability trying to use a “self-help legal website” to
create their estate planning documents.
The stakes are too great to not be absolutely sure it’s done correctly.
22. Don’t
take this as a personal affront, but unless you’re an estate planning attorney,
you probably don’t know exactly what kind of estate planning documents you
need.
This is very much akin to a novice golfer
ordering a set of clubs online because they are a little cheaper than purchasing
from a professional club-fitter.
That novice may end up with a set of clubs that is horribly mismatched
for his height, swing-speed and swing trajectory. However, he may use them his entire golfing career without
ever knowing anything is wrong except that he’s just not a very good golfer. That same principle applies to estate
planning documents. I don’t care
how intelligent you are or how much research you’ve done on the topic, it’s not
likely that you (or a questionnaire on a website) can know or pose all the
relevant questions to ask to begin to correctly diagnose your situation.
The vast majority of my clients will start
out our initial conversation by telling me that they “just want a simple
will.” As I talk with them about
their families and assets, I usually discover that, for the majority of them, a
“simple will” is not an appropriate vehicle to help them achieve their
objectives at all. The questions
asked by a skilled estate planner in a face to face conversation are the only
way to be sure that what you’re getting what you really need.
3. 3. The
savings to be had by using an online legal document website are probably not that
great, or at least not great enough to offset the potential risks of not having
that face to face meeting with experienced and local counsel. I’ve run through the pricing structures
online in the past and, by the time all the fees and “extras” are added in,
you’re pushing pretty close to the “real live attorney” price. My advice is: Don’t try to save a
little cash by putting a band-aid on a wound that “might” need stitches. You don’t know if it does or not, and
only a professional is going to be able to tell you for sure.
Please also be advised that any comment or communication posted here will not be considered confidential and does not create an attorney-client relationship with me or our firm. Also note that I do not seek to practice law in any jurisdiction in which I am not licensed to do so.
