Estate Planning DIY tip…don’t DIY…

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About a year ago I was contacted by the son of an elderly woman who had just passed away.  He asked me whether an unsigned estate plan is valid.  Puzzled, I asked him a few more questions and learned that his mother had found some forms online as a make shift estate plan.  She had printed the documents out but had never “filled in the blanks” as to the beneficiaries, executors and powers of attorney.  She had only filled in her name.  Worse, the documents cited Georgia statutes and a notary acknowledgement from Cobb County, Georgia.  The documents were never signed.  We’re still not sure if Mom had intended to sign the documents but never got around to it or assumed the documents, even unsigned, would suffice.

The phrase “DIY” means do it yourself.  Turn on the TV and you’ll see people completing household projects themselves, saving lots of money in the process.  DIY Estate Planning has the same core principle…why not just use standard documents and save the expense of estate planning?  In the above example, the son did not learn of the unsigned (and incomplete) DIY Estate Plan until his mother had already passed away.  Estate planning errors are generally not discovered until the person dies.  That’s one of the biggest problems.  The other problem is that estate planning is inherently complex.  As in the above example, most good estate plans make necessary references to the statutes of the state where the client lives.  Additionally, DIY Estate Planning requires the client to know what they need.  They have to know who they want to be executor, who they want to be the power of attorney, why they want those people and how to divide their estate.   Even in simpler estate plans, there are at least 25 to 30 questions to review with a client.

As it turns out, the mother in my example above lived here in Missouri and had two grown children.  She owned a bank account, a car and had years ago placed her house in her name and her children’s names, in equal shares, via a quitclaim deed.  She never told anyone that she had recorded the deed.  The document, oddly, was absolutely perfect in every regard.  So the story has sort of a happy ending.  The bank account and car were not worth much so were able to complete a small estate probate, which expedited and eased the process.  The fees and time involved were reduced, and the house passed outside of the estate because of the quitclaim deed.

The son and his sister were very relieved.  He told me his sister felt especially bad that her mother had recognized the need to get an estate plan but had gone about it incorrectly.  As the son said, his mother always had the right intentions but “she had a habit of making things more difficult than they needed to be.”

I certainly appreciate the DIY ethos.  There’s nothing quite like the joy of repairing your own car or turning a house project from paper to reality.  Because I enjoy landscaping, I have completed a few DIY projects around my house.  Some of them have turned out great, some of have turned out awful.  I beam with pride at the great projects and have spent three times as much time fixing the awful ones.  But there’s harmless lessons in making bad landscaping choices….or at least I keep telling myself that.  Truth be told, if I added up the cost of my mistakes, I could have and should have hired a landscaping expert to do the projects right the first time and with expert workmanship.