Putting together an estate plan is a unique process for everyone. Although legal professionals will caution against the use of do-it-yourself (DIY) estate planning tools, nothing sends the message home better than real life examples of the errors that can occur when using these fill-in-the-blank documents.
Example #1: The cut-and-paste mistake
The “I love me” estate planning mistake is arguably the most common error in DIY estate planning. It involves a simple will designed to leave everything to the surviving spouse. Because everything can look so similar in these documents, it is easy to make the following mistake as shown by an example provided by the vice president with Ohio National Financial Services:
Bob’s will: I leave everything to my wife, Mary.
Mary’s will: I leave everything to my wife, Mary.
After reading through line after line of legalese while putting together the will, the creator may have mistakenly had Mary leave everything to herself instead of entering in her husband’s name. What seems like a relatively benign mistake can result in additional cost and time to correct.
Example #2: Failing to include an executor
Many of these DIY plans include a space to designate an executor. The executor is, essentially, the individual who administers the will and estate plan. A failure to designate an executor can result in the court taking on the role, which is exactly what you are trying to avoid by having an estate plan in the first place.
Example #3: Missed opportunities
Changes to tax law can directly affect one’s estate plan, as can changes to the family structure. As a result, life events like births, deaths, marriages or divorces as well as tax law changes should trigger a review of the estate plan. In some cases, a failure to adjust for these changes can result in increased tax obligations or money going to unintended beneficiaries.
