WEB BASED ESTATE PLANNING: THE NEXT FRONTIER OR A DEAD-END STREET?
With each passing year, more and more of everyday life moves online. The emergence of COVID-19 and its impact on Florida estate planning, has only accelerated that trend. You can work from home, go on virtual tours of museums, or even take guitar lessons from the comfort of your own living room. It’s no surprise, then, that there is an emerging trend for virtual estate planning in Florida and most other states across the country.
What is Web-Based Estate Planning and How Does it Work
Estate planning that operates from a website or using web based tools primarily, also known as “online estate planning” or DIY estate planning, which I’ll refer to all as hereafter as “virtual estate planning” offers an alternative or complement to traditional estate planning with a lawyer. LegalZoom is the most well-known player in the field, offering products such as a DIY last will and testament, but there are many others, and more are emerging all the time.
As an estate-planning tool, the way online planning generally works is that, in exchange for a fee, you receive digital access to templates for common estate planning documents, such as wills, living trusts, and healthcare directives. The templates are usually state-specific, designed to comply with the laws of each state. Thus, a virtual-planning platform might offer one will template for Florida, another for Texas, etc. However, not every service makes all of their forms available for use in every state.
As part of the process, the planning software asks for your basic identifying information and estate-planning objectives, along with information more specific to the form you are creating. When preparing a will, for example, you’ll describe your estate planning assets in Florida and elsewhere as well as your designated beneficiaries and identify someone to serve as your Florida Personal Representative. Once the customer information has been input, the software populates editable fields within the template. If everything works as intended, you’ll end up with a legally valid document that becomes effective after it has been printed, signed, witnessed, and notarized in accordance with Florida law (or the laws of whichever state is applicable).
Importantly, virtual estate planning is usually limited to document preparation. The software can’t provide legal advice or represent you in probate in Florida or elsewhere. So, for the concept to work right, you need to already have a pretty good idea of what you are trying to accomplish and the basic approach you want to take.
Web-based preparation of legal documents is by no means restricted to estate planning. LegalZoom and its competitors offer numerous business-related forms such as articles of incorporation, partnership agreements, and operating agreements for LLCs in Florida and elsewhere. But the personal nature of estate planning—and the widespread popular need for estate-planning documents—have led to rapid growth in the number of people planning their estates online. In turn, the proliferation has fermented disquiet among some legal professionals.
How Virtual Estate Planning in Florida Compares to Working Directly with an Attorney
The prime selling points of online estate planning are that it is convenient and cheaper than hiring a locally licensed lawyer. LegalZoom boasts that it can help you prepare a will for as little as $89. You’ll have a hard time finding a lawyer who can draw up a will for you that cheaply.
Considering that a large number of consumers simply cannot afford to hire a lawyer, the importance of price should not be discounted. After all, when the choice is between using templates provided by a credible online platform or having no assistance at all, virtual planning is the better option for many people.
Efficiency and convenience are also noteworthy advantages of online estate planning. By using a service that you can access from home on your own time, you avoid the need to take off work or otherwise disrupt your schedule to meet with a lawyer. And, after the necessary information is provided, the documents are created nearly instantaneously, so the overall process takes less time. If you’ve ever compared filling out a paper tax return to using tax-preparation software like TurboTax or TaxSlayer, you know that good software can make document preparation much quicker and simpler.
The other side of the coin is that the convenience of pre-built templates comes with a loss of personalization. Most online templates cannot be customized beyond the user-populated fields. If the form is perfectly suited to your circumstances, that’s not a problem. But, of course, every person’s situation is different. If you have an unconventional family structure, large or complex estate, or any other state of affairs not contemplated by the template, you might not be able to tailor it to do what you need it to do.
When you work directly with a capable attorney, you have the opportunity to discuss your individual circumstances and goals. Experienced attorneys can draft provisions customized to your situation and are also more familiar with the idiosyncrasies of state law that can cause potential estate-planning headaches. Web-based software is much less likely to identify and address state-specific statutes that might affect only a minority of their customers.
Under Florida law, for example, the powerful “elective share” afforded to surviving spouses can lead to unanticipated problems for couples with children from prior relationships. The elective share guarantees a surviving spouse a minimum 30% interest in a decedent spouse’s estate—even if a will says otherwise. The statute protects spouses, but it can also lead to inadvertent disinheritance of a decedent spouse’s children. If your virtually drafted will doesn’t account for the elective share, the statute could preempt the will and thwart your planning goals.
A seasoned estate-planning attorney in Florida takes the time to discuss and become familiar with your situation, identifying potential snags not spotted by software. And, when those issues are present, an experienced attorney knows how to address them in advance. If you’re only working with a brief online questionnaire, a circumstance with major long-term ramifications on your estate might not ever come up. Even the best template can’t anticipate every possible scenario.
Along the same lines, attorneys are in a better position to help you revise your estate plan if your situation changes in the future. If there is a birth or death in the family, or if you or a prospective heir gets married or divorced, you may need to make important changes.
Another potential issue with virtual planning is that, if you don’t have an experienced pair of eyes to review the final product, technical errors are more likely to crop up. Every state has its own specific requirements related to estate planning, and even a small mistake or omission can render a document ineffective. In Florida, for instance, wills must be in writing, signed by the testator, and attested by two witnesses with no interest in the estate. If even one of these requirements is left unmet, a will won’t be admitted to probate. Estate-planning attorneys in Florida and elsewhere are trained to catch little errors that might make a big difference.
Similarly, lawyers are trained to craft legal documents with precision. If language is ambiguous or equivocal, it can be misconstrued or misinterpreted. Estate-planning documents in particular require precise language because, after you pass away, you are no longer able to clarify the meaning or intent of testamentary language.
Perhaps most critically, an attorney can assist with the big-picture process of developing an estate-planning strategy. Virtual-planning forms assume that you have already weighed your options and decided on an approach. Experienced attorneys are more familiar with alternatives that might be better-suited to your situation.
By way of example, Florida recognizes several will alternatives that allow you to transfer property upon death without going through probate. Depending on the situation, the same asset might be transferable using a will, joint-ownership structure in Florida, POD or TOD designation in Florida, or a Florida living trust. An attorney can advise you on the available options, the pros and cons of each, and help find the approach best-fitted to the scenario. And an experienced attorney may identify special considerations—like asset-ownership issues in non-traditional relationships—that you might not realize are important and that an online form would leave unaddressed.
Is Virtual Estate Planning a Viable Option
Attorney organizations throughout the country have voiced serious misgivings about the proliferation of online estate-planning sites. Of course, virtual estate planning presents potential competition for actual lawyers, so a cynic might say that critical attorneys are motivated by their own financial interest. But, while there may be some of that, too, the DIY approach does have some very real weaknesses, as noted above.
The ABA Real Property, Trust & Estate Law Section suggests that, while online resources have their place, they “should be used with caution.” If you have a fairly simple estate—and if you don’t intend to do anything out of the ordinary or employ any sophisticated estate-planning strategies—preparing noncomplex forms using an online service may be a good option. But if you intend to do anything more complex than creating a simple will that leaves assets to close relatives, proceeding without an experienced lawyer is risky.
Precise, unambiguous estate planning is critical to not only the person whose estate is being planned, but to his or her loved ones as well. A technical error, unaddressed issue, or drafting mistake can lead to significant problems for surviving family members. More than one family has suffered through long-term discord originating with a poorly planned estate. And litigation arising from a faulty document, when it occurs, costs exponentially more than the savings from a DIY estate plan.
A best-of-both-worlds approach may be to use virtual estate planning resources under the supervision of a qualified attorney. At the very least, hiring an experienced attorney to proofread a document created using an online template, though adding to the expense, will also significantly reduce the risk of a disastrous error. LegalZoom and similar sites have started including brief attorney consultations within some of their packages, though the Florida Bar cautions attorneys partnering with web-based services to ensure such arrangements are in compliance with all applicable ethics rules. Likewise, some tech-savvy Florida estate-planning lawyers are now employing sophisticated software to make the estate-planning process more convenient and efficient for their clients.
The State of Florida recently acknowledged the advantages of technology in Florida estate planning when it passed a law permitting electronic wills and remote notarization of legal documents. Under the new rule, a Florida notary may attest to a signature observed via video link. If the document being notarized is an electronic will, a Florida testamentary trust, healthcare advance directive in Florida, or waiver of spousal rights in Florida, the law includes additional requirements to ensure the signer’s identity, mental state, and capacity to execute a testamentary document. Properly used, remote notarization should allow Floridians to gain some of the advantages of virtual planning without sacrificing the skill and personalization provided by an experienced Florida attorney.
Steve Gibbs, Esq.