Before I became a lawyer, I thought I could do everything myself and not have to pay exorbitant attorney fees. Now I am educated enough to know that lawyers are trained to help you execute your legal documents properly. The costs you pay are far less than doing it yourself and subject to unforeseen tax or inheritance consequences. Here are some examples.
Transfer property to children or make children Co-tenants. I have a client whose parents have listed her and her sister’s names on a property that her parents already own as joint tenants. The idea is that children will inherit without a will when the parents die. They did inherit without the need for a will, and because they were children, there was no tax increase when the parents died. But when my sister died, my client was hit by a huge property tax spike because she and her sister weren’t the original buyers and transfers between sisters, even as joint tenants, weren’t exempt from reassessment. The cost of annual tax increases can be avoided by consulting an attorney before they take matters into their own hands and add children to the deed.
A woman was advised by “friends” to place her only son in her house as a co-tenant to avoid probate and not have to create a trust. After he transferred the house to his son, his son had an accident while drunk driving, was sued and judged against him and his property, including the house. Mom lost the house because she tried to avoid probate the cheap way.
Record deed. Sometimes clients want to avoid the relatively small fees lawyers charge to draft and record the deed for them. I have a woman who sits on the deed and hasn’t recorded it for 25 years because she won’t pay the attorney $250. That means his trust is unfunded (nothing is put into it), and, should he die, his estate will go through probate, even with a trust, because he never “funded” the trust. An unfunded trust is not a legal trust.
Other clients attempt to compose, execute, and record trust funding deeds themselves. When he had tried three times and was rejected by the recorder each time, he came back to me to get it right. The time and effort it takes to keep making mistakes isn’t worth a few hundred dollars. At least the Recorder told the person that the behavior was inappropriate. He could have recorded it and after the client’s death the trustee could find it was not a valid deed and be forced to submit Heggstad’s petition to a probate court at a much higher cost than letting the attorney do it in the first place.
One couple owned 8 properties and insisted they would record all the properties themselves rather than paying me $250 each for me to do it for them. Three years later, they haven’t done so and their trust is still unfunded. Result: my trust in them is not yet valid. If they died today, their estate would go through probate, even though they spent several thousand dollars running the trust.
Finally, another client didn’t make sure his nephew in another state signed and legalized the grant deed that transferred the property to his estate, so it wasn’t on his estate when he died. Result: the client does not legally own the property and the heirs are out of luck.
A durable power of attorney that does not include the proper power of attorney. I’ve often seen power of attorney done from internet forms that don’t include the power to revoke, change, or terminate the trust. Of course, the client wants to be able to change beliefs and does not have the authority to do so. I see many forms of do-it-yourself called “limited power” but the space where limited power must be declared is left empty. Result: unlimited power. Finally, the do-it-yourself forms you find on the internet don’t tell you how to sign as an “actual attorney” and I’ve seen people get into trouble just for signing the principal’s name and thinking they signed correctly as an actual attorney when they actually did. actually commit forgery.
Having an attorney draw up a complete power of attorney and provide adequate warning to the principal of the extraordinary powers he entrusts to the attorney—in fact by far the safest and, ultimately, cheapest way to obtain these essentials, and important, document.
Execute Advanced Health Care Instructions on standard forms that do not include your specific wishes or exceptions. While this form is adequate, I want to make sure my clients have thought through and decided on their desire for life-sustaining treatment, so agents don’t have to guess and will be asked to follow the wishes expressed by the principal. The standard form doesn’t have options for possible wishes the client might like, so I’m attaching the client’s wishes to my follow-up health care directive.
My reason for estate planning is to help people. However, I prefer to help people create good planning documents that will prevent the problems that might arise from poor planning by an amateur rather than a professional. My advice is: Don’t try to create your own estate planning document. The money you save by letting a qualified attorney prepare your estate plan is yours alone! And that can be a significant savings!