Economist Paul Krugman famously predicted that the Internet’s impact on the economy would be no greater than that of the fax machine. Of course, that’s not how things worked out. And, today, you can get just about anything you want online, including legal assistance. But that doesn’t necessarily mean that web-based legal help is always a good idea. Thus it is important to knowing when this is a bad idea. For our purposes, we’ll be focusing on why and when to say NO to web based Florida estate planning documents, as this is our area of expertise.
The nature of online communication is that it tends to be less personal. Correspondingly, online legal assistance—especially assistance with financial planning and small business formation—tends to be oriented toward form-driven, cookie-cutter services. Now, sometimes this is all you need, and, in those scenarios, online legal help can be a good cost-saving option. For more complicated legal issues, though, there’s no substitute for the advice of an experienced attorney. The trick is being able to tell which situation is which.
CONCERNS WITH WEB-BASED ESTATE PLANNING DOCUMENTS
We live in a time when web based products of all kinds are abundant and often the choices available via the web seem to surpass what is available through more traditional means. While web based Florida estate planning documents and services, focusing on things like virtual Florida, wills, trusts and estate planning. However, there are definite drawbacks and thus it is important to know when to say no to web based Florida estate planning documents.
What is Web-Based Legal Document Assistance and How Does it Work?
In general, online legal services are internet-based programs marketed to consumers as an alternative to the traditional approach of hiring a lawyer directly. Web-based legal assistance can come in multiple forms. The most common online legal services—and the ones most relevant to estate and business planning—offer help with preparation of legal documents and formation of business entities. Other internet-based companies provide access to legal consultations on a subscription basis or let consumers submit written questions to legal professionals for a fee.
In the estate-planning and business formation contexts in Florida, web-based do-it-yourself Florida estate planning document services typically provide online access to programs designed to construct common legal instruments used for estate planning. The process is based around a state-specific template completed using information input by the user. So, for instance, if you wanted to prepare a web based do-it-yourself Florida last will, the website would start by asking for your state of residence and then walk you through a series of questions about your personal circumstances.
Next, the software transfers the provided information into the template, resulting in a basic, legally-compliant (in theory) draft will. You pay whatever the company charges for wills and can then print and execute the document, observing any formalities required in your state (such as Florida notarization, witnesses, etc.). If everything works out right, you end up with a legally valid will that can be admitted into probate in Florida or elsewhere when the time comes.
Along with wills, there are a bunch of other standardized legal documents, such as Florida Durable Powers of Attorney and Florida Advance Healthcare Directives, you can create using online services. One popular website offers living trusts, living wills, financial and healthcare POAs, and a suite of services for businesspeople in need of assistance with organizing a new business entity. Another service advertises real estate leases and deeds, non-disclosure agreements, and even property settlement agreements for uncontested divorces, along with a host of other common legal documents.
Pros and Cons of Web Based Florida Estate Planning Documents
The well known big advantages web-based legal services bring to the table is that they are convenient and usually cheap—or at least cheaper than hiring a locally licensed attorney. For example, one website says that it can help you form an LLC for as little as $79. You’d be hard-pressed to find an actual lawyer who could match that price. You still need to pay your state’s registration fees, but you would have to pay for those with a real lawyer, too.
Online legal services are also convenient and time-efficient. You can work through the website’s document-creation program from your home computer or smartphone. Depending on what you’re doing, it might only take an hour or two. And you can do it whenever you have the opportunity, rather than scheduling an appointment for a time when both you and the lawyer are available. The end result is often that you get the final product sooner than you could get it from a lawyer, and it requires a smaller investment of both time and money.
Conversely, a legal document prepared online using a pre-built template and software program is much more difficult (or even impossible) to customize. If your situation is even a little out of the ordinary, you may need a custom-tailored legal instrument that you can’t get from a software program alone. If you ultimately end up with a document that doesn’t do everything you need it to do, you didn’t really get a good deal. And the long-term consequences for your estate or business can be immense.
An experienced estate planning attorney in Florida (or your home state) can take your precise objectives into consideration and, when appropriate, suggest alternate strategies that might more efficiently achieve them. In Florida estate-planning, for instance, there are many different methods of transferring property to heirs—wills, trusts, POD or beneficiary designations in Florida, joint ownership, to name a few. A lawyer can provide an opinion as to which option is best-suited to your situation and goals. A software program can only do what you tell it to do.
An attorney licensed in your state is also in a better position to spot potential unintended consequences that could arise due to peculiarities of state law. Or, if your circumstances change in the future—due to a birth, death, or marriage in the family, for example—an attorney can provide advice on how to adjust your estate plan to the new state of affairs.
The Risk of “Self Help” Legal Florida Estate Planning
The first thing that folks need to know when it comes to knowing when to say no to web based Florida estate planning documents, and legal forms websites actually tell you this, is that these services are “self help” which, as an example, is nothing more than your putting together your own do it yourself (DIY) Florida last will with on line guidance. Sure they offer some tools, however, by their own disclaimer they are ducking any responsibility for those tools and how they are prepared.
This would be the equivalent of a “self help” auto service center where you would get out of your car to change your own oil. Sure, they would provide the ratchets, the oil and the filter and would include a hefty disclaimer that says that “this is a self help oil change and we cannot be held responsible if the engine blows”. I do like this analogy and think its incredibly accurate except that it is easier to change your oil than to draft a revocable or irrevocable trust.
3 Little Known Shortfalls of Web Based Legal Documents
1. Web based legal documents are not able to truly ascertain what is important to the client’s estate because there is no professional to read between the lines.
For example, a questionnaire may ask if someone was previously married or if they own a business. That is about as far a a questionnaire can go. However, a good estate planning attorney will probe more deeply to ask about the relationship with the ex-spouse and any minor children. I’ve had clients who get along marvelously with an ex-spouse and not so well with the current spouse… Similarly a good trust lawyer would ask probing questions to determine how the business would keep operating or be sold if the owner dies or becomes disabled.
Another example, a questionnaire may ask is who the desired successor trustee in Florida is…but cannot ask whether the children get along or how advisable it is to give one adult child power over the other adult child’s estate. These circumstances are often ripe for trust litigation in Florida which is what everyone wants to avoid.
2. Boilerplate living trusts created on line are likely to miss important special planning options because these options are generally not available on line.
For example, if a person has primarily assets in an IRA, then an IRA beneficiary trust may be more appropriate then the boilerplate revocable trust because this kind of trust will protect the beneficiaries proceeds from creditor attacks. Another example is where an irrevocable trust may be advisable for estate tax planning in Florida or where there are children from a previous marriage rather than putting everything in a boilerplate Florida revocable living trust. Another common situation is where the client is a Canadian citizen and another product such as a Cross Border Trust or Canadian Florida Land Trust may be more appropriate for the client’s specific planning needs.
3. A limited liability company created on line is of minimal value because an LLC is generally only is useful as its Operating Agreement and a boilerplate Operating Agreements are often not effective.
For example, web based legal document providers push LLCs all day long but they do not address 2 key questions that always arise if a lawsuit is filed involving the LLC. The first question is whether a proper LLC book was kept and how is this accomplished? The next and even more important question is whether the LLC Operating Agreement in Florida says the right things? More specifically, form pushers don’t tell you that Operating Agreements are supposed to be customized for the specific business and membership objectives. Also, an Operating Agreement should have creditor protection provisions in it and should specify what happens to the company and or the members’ respective interest in the event of death, disability, bankruptcy, or any other dispute.
Thus, a professional LLC creation process should include an in depth review of assets, business goals, and partnership roles.
So those were just three of the many things unspoken in the world of web based legal documents. As I’ve said before, your legal documents deserve careful consideration and what they say will become extremely important if and when difficult circumstances arise.
For all of the above reasons, it is critical to know why and when to say NO to web based Florida estate planning documents.
Steve Gibbs, Esq.
This is an updated version of an original post dated August 20, 2014.