Facebook provided a thought provoking moment for me today — surprising, I know! A friend posted a link to an NPR story about how one daughter took her grief and frustration following the loss of her Father and wading through the process of cleaning up his personal and financial affairs, and turned it into a mission to help others. The product was a website to help people “get their S*%$ together.” That is certainly one way of putting it! The article turns upon the assertion that “it takes really just a few hours now, rather than a pile of hours and thousands of dollars to do it later when you really need it done.” We couldn’t agree more. We would also add that when people plan in advance it is much less emotionally taxing. It is a preventative, “getting the ducks in row” process rather than a “planning for an imminent, sad event” process.
The article makes some great suggestions — including that everyone needs to secure a few key documents including: Will, Power of Attorney, Health Care Directive (sometimes called a “living will”), and Life Insurance.
We agree. The article also notes that people should maintain a file where critical information is kept — making it easier and less stressful for family and friends to help out during a tough time. This included:
Personal Information: Birth certificate | Bank names and checking, savings and other bank account information
Financial Information: Retirement account information, Credit card numbers | Mortgage information
Technology Information: Passwords for home computers, cell phone, email accounts, social networking sites and online accounts
Where I disagree, however, is the claim that: “Affordable online software options are available. I didn’t realize that creating a will, you don’t need a lawyer to do it for you. In most states you need two witnesses and/or someone to notarize it. And it can save your family weeks and weeks and hundreds of hours of pain and confusion and legal costs that you probably can’t afford.”
At the risk of sounding dramatic, this could not be further from the truth. The “affordable online software” option does not sit down and talk with you, software and fill in the blank forms do not learn about your family or use conversation to potentially gain insight or information that you otherwise may not even realize is pertinent to the planning process.
So what is the risk? You may be walking into precisely what the article discussing avoiding: Subjecting the remaining family to weeks and weeks and hundreds of hours of pain and confusion and legal costs that you probably can’t afford. If a couple has a false sense of security, it will only be after it is too late that the error or misstep in planning is discovered and THAT can cost you peace of mind, may contribute to family conflict, or an even greater financial loss than simply having an attorney prepare your Estate Planning documents.
For example, improper planning may gravely impact a child — appointment of a guardian may be poorly thought out or even executed in the wrong document or a child with special needs may lose their SSI benefits if they are not properly protected. An individual or couple who does not meet with a professional may not understand the various tools that may be used to plan for their retirement and using planning to minimize tax burdens in a legal manner. “DIY planning” for the sole purpose of saving a few hundred dollars is short sighted in light of the risks of improper planning.
I know it sounds alarmist. But our approach is this: For a process that our office strives to make relatively simple and cost-effective, why not know for certain that your children are going to cared for properly, that your estate will be administered in the manner you wish and that all of your proverbial ducks are in a row? We say it all the time here at Cayce & Grove: We love Do-It-Yourself projects — Estate Planning just does not happen to be one of them.
[To be fair — the article notes that the “Get Your S$%^ Together” author and creator provides the disclaimer that she does not intend to provide legal or tax advice.]