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| Using an online site is an automated process, just like bottling beer |
People who are cost-conscious or short
on time, often resort to self-directed websites to draft estate planning
documents. The most popular website where people can create legal documents is
probably Legalzoom.
My main critique of using websites to
create documents is that the client is given no legal advice when completing
the process. These websites have explicit disclaimers stating that the website
is offering no legal advice whatsoever. Hence, the client is left with figuring
out the legalities themselves.
In terms of estate planning, figuring
out the legalities yourself is not the ideal circumstance.
One of the principal reasons why a
person with a home writes a trust is to avoid probate. Probate is quite
expensive and lengthy so most people try to avert it. The key step is to
transfer the settlor's home to the trust. Herein lies the problem of using an
online document-drafting site, it cannot personally advise you to transfer the
home into the trust nor can it actually effect transferring the home into the
trust, i.e. a trust transfer deed. Both of these would constitute rendering
legal advice, which it is prohibited from doing. Ultimately, the client has a
trust but not funded with the home. When the client passes away, the home will
need to be transferred through probate or via a Heggstad petition if
certain facts are present. The upshot is that the client's goal of having a
fluid transfer of assets from themselves to their beneficiaries has not been
achieved. In terms of real-world application, the following example has occurred
to a couple of client I have had over the years.
My non-attorney friends occasionally
ask me if I am threatened by Legalzoom and other online document drafting
sites, that is it is a competitor of mine. I tell them that these sites are
actually beneficial to attorneys, albeit in a perverse way. Usually clients
that use these sites botch the estate planning process because they are not
given competent legal advice. When they come to me, I have to rectify the
shortcomings so that the person's original intentions are met. Whereas, if they
had just come to me in the first place, they start anew so there is less work
involved that dictates a lower fee.
On a side note, Legalzoom does
recognize my work. An article I wrote about modifying irrevocable trusts is
cited in a Legalzoom article on the topic. While I
appreciate the recognition, I am not about to give a ringing endorsement of
Legalzoom because it mentioned an article I wrote.
