Making an estate plan is a very personal matter. Who knows better than you what your assets mean to you and how you want them handled? That’s why many people are tempted to skip the step of working with a professional who is not as familiar with their life. They find it more comfortable to create an estate plan on their own.
Is it really a good move to keep your estate plan to yourself, or not? The answer, as you might have guessed with money matters, depends. Let’s go over a few of the pros and cons of doing your own estate plan, versus doing one with a professional.
The Advantages of Doing Your Own Estate Plan
The main advantage of doing your own estate plan, aside from having full control and privacy, is that you can save a significant amount of money – at least in the short term. Hiring an estate planning attorney can be expensive, so doing your own estate can keep your cash flow in positive territory if you’re on a tight budget.
Having any plan in place is better than having no plan at all, which is the case with many Americans. In fact, only 44% of Americans reported that they have a will, according to a 2016 Gallup Poll survey cited by NerdWallet. People tend to think that estate planning is very complicated and costly, when it doesn’t always have to be.
The reality is that, while it can get expensive, costs can vary widely with some attorneys charging flat fees for simple estate plans for as little as a few hundred dollars.
If something happens to you without a will, your families will be confused about how you intended to pass on your wealth. If you’re someone who doesn’t have a will or estate plan, drafting one yourself will be a step in the right direction.
The most important thing with completing documents on your own is to make sure your intentions are very clear and leave no room for confusion.
Disadvantages of the Do-It-Yourself Approach
First, while you can indeed save money in the short-term, many people find that a financial professional can save them money in the long-term.
One of the major ways a financial professional can save you money is by helping you avoid costly mistakes. If your situation seems easy and straight-forward, unfortunately, there is always room for error.
Making a mistake in estate planning can lead to a heartbreaking situation. Imagine if your assets were not divided up and passed on as you intended after your death. For example, if you forgot to account for estate taxes and your heirs were left with much less than you planned to leave them. Your family members could easily get embroiled in conflict and tensions that could have been avoided with a correct will. However, sadly, that kind of situation would be impossible to correct once you are gone.
An estate attorney will have significant experience drafting wills, so they will have the knowledge for avoiding common and costly mistakes.
How to Choose an Estate Planning Attorney
If you do opt to consult a professional for help drafting your estate plan, you want to connect with someone who is reputable.
You can turn to your other financial professionals like your tax professional, banker, insurance agent, or CPA for recommendations of estate planning attorneys that they know and trust. They might be able to recommend someone who is well suited to guide you through the details of your own situation.
Family and friends who have worked with an estate planning attorney are also a great source for referrals, especially because you can trust that they will give you honest advice.
You can research online to see how others have reviewed their estate planning attorneys in your area. Look for ones who specialize in your specific needs. Find out how long they have been practicing and how they prefer to communicate with their clients.
Before you officially hire an estate planning attorney, have a casual interview with them to make sure they feel like a good fit and that you will be comfortable working with them. Make it a point to fully understand all their fees and how they will charge you for their service. Trust your gut instinct with your first impression. After all, money matters are personal!
A Middle Ground
If you don’t want to take the step of hiring a financial advisor, and you don’t want to take the risks of doing your estate planning yourself, you do have a middle-ground option.
You can use software like LegalZoom or Rocket Lawyer to create a basic legal will, with or without accompanying legal advice. With these programs, you pay a small fee and have access to legal templates that can help you address the details you need and avoid costly mistakes. With LegalZoom, last will and testaments start at $89, and with Rocket Lawyer it’s $39.99 per document or you can pay $40 per month for access to attorneys.
Legal software can be convenient and cost-efficient, but it’s not a perfect substitute for getting in-person advice. Templates are designed for everyone, but your estate attorney can more easily customize a document to your specific needs as they hear firsthand about your situation.
The Bottom Line
Think carefully about whether you really want to do your own estate plan or if you can hire someone to guide you through the process. While privacy and saving money are advantages of taking the solo approach, getting professional guidance is a much more secure scenario.
No matter if you develop your estate plan on your own, or if you hire an attorney to work with you (or if you use legal software), it’s a good idea to plan on revisiting it every few years. That way, you can make sure your estate plan matches your intentions for passing on your assets to your heirs. Consider it a gesture of love!
Here’s to the Wellness of Your Wallet!