The September 7, 2018 the New York Times article “Making Wills Easier and Cheaper with Do-It-Yourself Options” discusses a number of very low cost, or even free, online services available to draft documents such as wills, trust, durable powers of attorney and healthcare proxies. The reporter, Paul Sullivan, does point out that estate planning attorneys (such as myself) question whether such online services miss the nuances of a client’s situation, but the online services, as presented, seem to be a very good alternative for most people. Implicit is that the benefits of using traditional estate planning advisor is not worth the expense.
Mr. Sullivan and the creators of these online free or low cost document generators have it exactly wrong. The value of an estate plan is not in the documents but in the planning. Without planning, the documents are worse than useless.
Estate plans combine three elements: learning from the past, adapting to the present and anticipating the future. The document generators codify learning from the past through their processes and procedures. A Power of Attorney Holder or a Personal Representative adapts to the present. Only planning, with the help of a professional advisor, anticipates the future.
Dwight Eisenhower said “In preparing for battle I have always found that plans are useless, but planning is indispensable.” It is the advisor-lead planning process itself that is of value to the clients, not the documents. By planning I mean 1) speculating about the cause and effect relationship between what you do today and what will happen in the future relative to your objectives 2) asking “What facts, if they exist, would prevent you from achieving your objectives?” and 3) finding out how likely it is that those facts could exist. By examining these alternative facts, and what to do if they occur, you can anticipate possible future situations and know what to do when it happens.
Here is an example: I want that, at my death, all of my assets go to my wife, if she is then living and if not then to my children equally. I, therefore, draft and execute a will that reads:
“I make this my last will, giving all of my assets, both real and personal and wherever situated, to my wife, if she survives me, and if no then equally to my children, the issue of any deceased child taking their parent’s share equally, and asking that my wife be my personal representative without sureties on her bond.”
Properly signed and witnessed, this is a valid will. But what are the facts that, if they exist, would prevent this from happening? Here are a few:
- Say I have a retirement account and I have life insurance from before I was married. Because each of these are contracts, the assets are distributed according to the beneficiary designation forms I signed when I started the retirement savings or purchased the life insurance – which at the time were my parents (since I was not married nor had children at the time). The fact that I have such contracts with out-of-date designations means that the assets do not go to my wife; instead they will go to my 95 year-old father.
- None of my children have a drug problem, but it is possible that one or more of them could be caught up in the opiod crisis. If one of them does so, and has judgments against them from creditors at my death, those creditors get whatever assets that child might receive from my estate. The fact that a child might have judgments against them due to an opiod addiction means that assets will not go to my child, but to their creditors instead.
- I do not expect that my wife and my children will die before I do, but it is possible. If any grandchildren are under the age of 18, any assets will not go to them but rather to a guardian appointed by the Court until they are 18. The fact that my grandchildren might inherit from me but be underage means that my assets may be diverted into the hands of a random guardian appointed by the Court.
- I own my own law practice. Since neither my wife nor any of my children are lawyers, they cannot inherit the practice and much of the value of the good will of my practice will disappear the moment of my death. The fact that I am in business for myself and so much of the value of the business is based on my being there means that my wife and my children will not get the full value of my business after my death.
None of these situations are guaranteed to occur, but they are also not utterly improbable either. Once anticipated as a possible future situation, there are actions I can take such as changing beneficiary designations, providing that assets are protected for children or grandchildren who need that protection and to getting, or replacing, the value of my practice to my wife and children at my death. Some of these actions are documents, but some are not. In either event, for my clients in similar situations, using a basic will may save them some money today, but will not prompt them to anticipate the future. By not planning, they cannot avoid risking the loss of their assets during the administration of their estates.
By going through the planning process and taking action today my client’s family to handle those situations, the client, and their family, can anticipate the future. The value to my clients is this planning process that allows my clients to anticipate the future. Paying me, or any estate planning advisor, today to avoid substantial risk to family in your estate is worth every cent.
Matthew F. Erskine is a fourth generation estate planning attorney practicing in Worcester, Massachusetts.