In light of the current pandemic, many Americans are becoming aware of the importance of creating or updating their estate planning documents. If you are considering writing your own will or using an online “do it yourself” (DIY) document creator, there are many reasons why this is one project you shouldn’t undertake without the help of a professional.

It is very easy to overlook important legal and technical planning points that can cause your estate to go to the wrong beneficiaries, or your beneficiaries to pay unnecessary higher taxes and/or expensive fees to attorneys or probate court. What may seem like a great deal could cost your family significantly in the long-run.  

A notable case reflecting this is that of a successful Washington businessman who wrote his own Will assuming his assets would be free of estate tax. However, due to the language he used, the IRS interpreted the law differently and claimed all the assets he passed to his wife were subject to $800,000 in estate tax plus $130,000 in back interest. His family went to court and eventually won, but only after nearly ten years of costly litigation and years of turmoil. One of the biggest problems with do-it-yourself plans is the lack of personal advice. You need a customized plan based on in-depth discussions about your family, their future and your legacy. In fact, many of the do-it-yourself resources have a strong disclaimer that says they are not a substitute for legal advice and to consult an attorney for help in understanding how the law may apply to your particular situation. 

A comprehensive plan is based on knowing what questions to ask to understand your individual needs. Some examples:

·         Owning real estate or a share in a small business

·         Leaving money to your grandchildren separate of your children ∙

·         Having children from a previous marriage ∙

·         Wishing to arrange long-term care for a disabled beneficiary ∙

·         Having minor children ∙

·         Updates in laws that affect retirement investments ∙

·         Protecting beneficiaries from foolish financial decisions ∙

·         Potential taxes that will be paid or avoided ∙

·         Creditor or divorce protection for your children

We have had distraught clients come in after they used software. In one case, a grandfather used software he purchased to name his grandchildren as heirs instead of his children. Skipping a generation allowed the IRS to tax his assets twice, and the grandchildren only received 20% of the estate. Even a simple estate plan can run into trouble if not executed properly. For example, Massachusetts requires two witnesses for a Will who must be present at the time the Will is signed. If one of those witnesses is also a beneficiary (like, for example, your spouse), that witness could be disqualified from receiving any assets from your Will or Trust. Some states allow handwritten wills, while others (including Massachusetts) do not recognize them. 

Tax planning of your estate is especially complicated. Most people don’t know how much money they can pass, without paying taxes. While the 2020, federal estate tax exemption is $11.58 million, in Massachusetts it is $1 million. A married couple does not automatically get $2 million tax free.  Our office has seen too many DIY plans that do not plan for taxes, which can cost your family $100,000 in unnecessary taxes to Massachusetts. These examples are just the tip of the iceberg of things an estate planning attorney will help you consider. Do-it-yourself kits are simply not designed to cover all possible financial and taxation situations. Every person has their own unique goals and objectives, and an estate plan should reflect that.

An effective estate plan will provide financial stability to your spouse, children, or other beneficiaries, protect your assets for future generations, ensure your wishes are carried out, and protect the privacy of your loved ones. We are currently offering free personal estate planning consultations, call today to schedule yours (781) 237-2815.

This article was provided by the Estate Planning & Asset Protection Law Center of Dennis Sullivan & Associates.