The Risks of DIY Estate Planning

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In recent years websites and online services have enabled people to craft their own estate planning documents; such as trusts, wills, and powers of attorney. While the cost for most of these services is relatively inexpensive, there are many pitfalls to be aware of when it comes to using the DIY approach. 

Our Orange County estate planning attorneys put together a list of a few of the risks involved with a do-it-yourself estate plan:

Leaving Behind a Mess

If your estate isn’t planned for appropriately, you run the risk of leaving a nightmare of fees, taxes, paperwork and legal proceedings for your loved ones. We have seen countless cases where an individual composes their own will, thinking that all of their wishes will be known and executed appropriately upon their death, but in reality they have left an arduous maze of legal action that could potentially cost thousands of dollars, and take years to resolve.

Consulting with an estate planning attorney will ensure that your wishes are

Fully Understanding the Implications

When handling your own estate planning, you run the risk of inadvertently giving someone more power than you want them to have.

This can be particularly dangerous when creating a power of attorney document. A durable power of attorney essentially gives a third-party the ability to control your finances in the case that you become incapacitated. It’s crucial that you understand all of the legal rights and responsibilities you are entrusting to another person, before you sign these documents. If this person isn’t properly vetted, then this person can take advantage of your investment portfolio and money, opening the possibility of fraud, identity theft, and shopping of sensitive information.

Additionally, you can inadvertently invite legal trouble. The everyday person will inevitably make mistakes in drafting a will, or even a trust. This is because not many people can fully conceptualize what they own and what they do not own, which can create blind spots. You will also need to factor in peripheral family members like siblings, stepparents, and children. The simple task of estate planning suddenly becomes a compound machine requiring expertise and the know-how of an experienced estate planning lawyer. Online websites like LegalZoom can be beneficial to become familiar with the process. But ultimately you will want to gain access to an independent attorney for advice before finalizing your plans.

It’s vital to remember that without an estate planning attorney reviewing your planning documents, you may not get when you think you’re getting. Just one piece of inaccurate information or an outdated certificate can undo the whole process.

Medicaid and Estate Planning.

When it comes to long-term care and estate planning, professional help may be required, especially since long-term care costs and the limits of Medicaid are different on a state-by-state basis.

One major mistake is failing to understand the Community Spouse Resource Allowance or “CSRA,” which is a significant type of protection for spouses. The states consider some forms of capital exempt, effecting your qualification for Medicaid. For example, a married couple’s furnishings, residence, or even medical equipment can be deemed exempt.

Nonexempt items include certificates of deposits, money saved, and mutual funds. For these items, applicants may keep 50% as a form of community spouse resource allowance. This allowance enables a spouse living at home the opportunity to save a set amount and not spend it down for a spouse seeking to qualify for Medicaid. It’s important to note that this allowance is determined on the value of nonexempt assets owned by the couple. An area where couples may go wrong is acquiring exempt-assets prior to admission, especially when they anticipate Medicaid application. This type of thinking backfires and can be costly.


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