We all like to save money. Sometimes however, we can lull ourselves into a sense of false economy by doing things which later prove counterproductive and end up costing us much more money. Wills (and collateral estate documents) are good examples of this. Kindly consider the following:
- We draft most legal documents with the objective of keeping the parties out of court. A will almost always ends up in court because an estate needs to be probated in order to transfer property (real and personal) and rights to property. As such, a good will needs to be drafted in language that courts clearly understand. If a court is confused, the judge will probably require hearings and the introduction of evidence to discern the decedent’s intent. This will add both to the time and the cost of settling the estate, often in a huge way. In this sense, a bad will is not necessarily better that dying with no will.
- Wills have been around for a very long time. Additionally, both the law of wills and real estate change very slowly. This is because we don’t want to invalidate a transaction or intent to transfer property (personal or real) that someone may have made years before with the full intent to rely on it later. This results in the use of specialized language that lawyers and courts understand precisely (so called “legal terms of art”). So, if you use the proper technical jargon, everyone is clear as to what is intended. If you don’t, please reread #1, above. Thus, if for example, you do not know the difference between a per stirpes distribution and a per capita distribution, you might want to seek out a lawyer’s help.
- In states like Texas, we have the option of electing to have a highly simplified probate. This is NOT the default. You must clearly inform the court by using the proper verbiage that this is what you are electing to do. If you do not do so, then your estate will be burdened with a much more expensive and time consuming probate.
- How much do you spend on auto insurance per year? You carry auto insurance (aside from the fact that you are required to have it) to protect yourself against the claims of third parties in the event of an accident that you hope will never occur. Usually, for a cost less than what you pay per year for auto insurance, you will be spending money to protect your loved ones from an event that absolutely will occur- your death.
- You may be neglecting to complete ancillary documents that should be a part of your set of estate documents such as: a general durable power of attorney (for disability planning), a medical power of attorney (which must be in a specific required form in Texas on and after January 1, 2018), an advanced directive (otherwise known as a living will), and a declaration of guardianship (either as a standalone document or as included in your general power of attorney).
- You may have placed items in your will that do not belong there or require more comprehensive treatment (see my earlier article on Trust basics). You may not have provided for items that you should provide for that an experienced attorney can advise you on.
- You may be tempted to think that this advice is self serving in that we charge to do wills and estate documents. But consider that if your DYI will proves to be inadequate or fails, then your estate will be paying the attorney considerably more in fees to settle matters, not to mention the emotional toll on your loved ones. We make comparatively little in fees to do estate documents. We make lots of money to straighten out the mess later.
So, if you must attempt a DYI project, I advise you to install a kitchen cabinet or change the oil in your car. Estate documents are NOT DYI projects!