There are times in life when doing something yourself can save considerable amounts of money. There are other times in which it is necessary and/or smart to seek the help of a professional. Choosing which of these routes to take is often fairly intuitive, but not always.
Estate planning is a good example. Perhaps you think that your estate is not very large or complicated. Therefore, you can just find some free or cheap legal forms online and fill them out yourself. While this may work for some people, DIY estate planning is risky. If wills and trusts are not crafted carefully and worded explicitly, the end result could be family strife, legal disputes and increased tax liabilities. For these and other reasons, most estate plans would greatly benefit from the help of an experienced attorney.
The biggest problem with free online forms is that they are generic templates. They provide general guidance in a process that requires customization and specificity. As just one example, consider how you may need to customize your will and any trusts related to your children.
A fill-in-the blank form might be ok if you were equally dividing assets between all of your children and wanted those assets distributed all at the same time. But this isn’t always a good idea if one or more of your children cannot handle money responsibly. Perhaps they suffer from a drug or alcohol problem. Or maybe you wanted the money to pay for their college but you fear that they’ll use it on extravagant purchases instead.
In these situations, creating detailed trusts might be the best way to go. A trust can be tailored to give you more control over when your children receive the money (usually by age), and can give guidance as to how the money should be spent.
Please check back later this week as we continue this conversation.