Last week, I bought a fairly well-known estate planning software package for under $50 to see how well it would do in drafting a will. I assumed that I was part of a married couple living in Anytown, Virginia with a small, non-taxable estate that wanted to disinherit one of our three adult sons.
Unfortunately, I found that the software’s questionnaire lacked important guidance regarding certain relevant state laws, allowed for the selection of contradicting options, and did not fully explain the consequences of certain choices. It also did not recommend consulting a lawyer unless the estate exceeded $3.5 million. Here is my non-exhaustive list of concerns:
- Estate tax exclusion amount incorrect. The program separately listed this year’s exclusion as $2 million and $3.5 million. There is no estate tax this year.
- Common disaster clause. There was no explanation for why it might not be preferable for each spouse to state in their own will that the other is presumed to have died first.
- Software allows you to omit spouse from the will. It is better practice to specifically state in the will that the omission is intentional. However, the spouse will be permitted to elect against this omission in most states.
- Software allows you to not include any after-born or adopted children. Omission of such children will usually be presumed by the court as inadvertent, and the court will make provisions for them according to state law. It is better to specifically exclude a child by name to show your intent.
- Software allows you to disinherit child without mentioning that child’s children. If you specifically disinherit a child in your will, it is important to state whether or not that child’s heirs will also be disinherited.
- Contradiction between specific bequests and disinheritance. The software enabled me to disinherit my wife and son, but I could still leave them specific gifts.
- No mention of ademption. There is no discussion regarding what happens if I no longer owned specific property listed in the will.
- No warning about using up residuary. There is no warning that listing too many specific bequests could empty the residuary, thereby forcing the sell-off of your specifically gifted assets.
- Software allows you to avoid naming a guardian for your minor children. This can create a great deal of hassle for the kids. The common error is that a person will use the software before having kids, and then never update the will once kids are in the picture.
- No disadvantages stated of listing co-guardians instead of a sole guardian.
- Software allows you to avoid naming an alternate guardian.
- Software allows you to list desired guardians without consulting with the child’s other parent.
- No instruction to consult with person you name as guardian. The person may not want to serve.
- No reference to naming a custodian of the minor’s share of the estate.
- Software allows you to not require bond of non-resident executor. In Virginia, a non-resident executor must either post bond or appoint a Virginia resident to serve with him or her.
- Software allows you to avoid naming an alternate executor.
- Software allows you to opt for a limited probate procedure. In Virginia, this is governed by law based on the value of your estate. Your will does not control this matter.
- No instruction to consult with the person you name as executor. The person may not want to serve.
- Software allows you to omit clause resolving disputes between executors. It is better practice to explain how you want arguments resolved.
- Information about interested witnesses is buried in the “help” section. An interested witness is one who is listed as a beneficiary in the will.
- No mention regarding whether a living trust would be preferable.
- No mention of the importance of powers of attorney, living wills, etc.
Any single one of these errors can cause administrative issues. A will with all of these problems would result in probate and legal fees that would greatly exceed any savings you achieved by avoiding a lawyer in the first place. Please be careful!
- DIY Estate Planning : Savvy Money Saving Tool or Disaster in Disguise? (georgiawillslaw.com)
- An In Depth Review of Michael Jackson’s Trust – Part 1 (www.sofloridaestateplanning.com)
- 7 Important Concepts Likely Missed In Your DIY Estate Plan (estateplanninginfoblog.com)