Estate Planning

Online Wills - You Get What You Pay For

By Gregory Herman-Giddens

Last Thursday's Wall Street Journal's website featured an article on online estate planning programs: Before It's Too Late: A Test of Online Wills.  As you might imagine, I'm not a big fan of do-it-yourself estate planning, particularly for those who have substantial assets.  Creating a Will and other documents yourself with the help of software may be better than nothing, but it can create a sense of false security, as it did for the author of the article, Jane Hodges. 

In the articles, Hodges says: However, in crafting our revocable trust, the program presented a pop-up note indicating that people with more than $1 million in assets might need an attorney due to changing inheritance tax laws that take effect in 2011. (Our joint assets exceed this amount mainly due to hefty life insurance policies and the value of our home, which we don't own outright.) [Emphasis added.]

In this case Hodges did not see an attorney and thus failed to address a huge potential issue - estate taxes.  If the federal estate exemption returns to $1 million in 2011 as scheduled, assets over $1 million, including proceeds of life insurance policies, will be taxed at 55% for federal purposes, not to mention any state estate taxes.  Saving a couple of thousand dollars on legal fees could cost her beneficiaries hundreds of thousands of dollars in extra taxes.  Plus there are a whole host of other issues that can be addressed by an experienced estate planning attorney that websites ignore. Caveat emptor!

Full post as published by North Carolina Estate Planning Blog on November 16, 2009 (boomark / email).