Before I became a lawyer, I thought I could do things myself and not have to pay exorbitant attorney’s fees. Now I am educated enough to know that lawyers are trained to help you execute your legal documents correctly. The fee you pay is far cheaper than doing it yourself and getting hit with unexpected tax or inheritance consequences. Here are a few examples.
Transfer property to children or make children Joint tenants. I had a client whose parents had put her and her sister’s name on property the parents already owned as joint tenants. The idea was that the children would inherit without probate when the parents died. They did inherit without a need for a probate order, and because they were children, there was no increase in taxes when the parents died. But when sister died, my client was hit with a hefty jump in property taxes because she and her sister were not original purchasers and a transfer between sisters, even as joint tenants, is not exempt from reappraisal. The cost of the yearly jump in taxes could have been avoided by consulting a lawyer before they took matters into their own hands and added the children to the deed.
One lady was advised by “friends” to put her only son on title of her home as a joint tenant to avoid probate and not have to make a trust. After she transferred the house to her son, her son got in an accident while driving drunk, was sued and had a judgment against him and his property, which included the house. Mom lost the house because she tried to avoid probate the cheap way.
Record deed. Sometimes clients want to avoid the relatively small fee the attorney charges to draft and record a deed for them. I had one lady who sat on the deed and never recorded it for 25 years because she didn’t want to pay the attorney $250. That meant her trust was unfunded (nothing was put in it), and, had she died, her estate would have gone through probate, even with a trust, because she never “funded” the trust. An unfunded trust is not a valid trust.
Another client tried to draft, execute, and record the deed funding the trust on his own. When he had tried three times and had it rejected by the recorder each time, he came back to me to do it correctly. The time and effort it takes to keep doing it wrong is not worth a few hundred dollars. At least the Recorder informed the man the deed was improper. He could have recorded it and after the client’s death, the trustee could have discovered it was not a valid deed and been forced to submit a Heggstad petition to the Probate court at a significantly higher cost than letting the attorney do it in the first place.
One couple had 8 properties and insisted they would record all properties by themselves rather than pay me $250 each for me to do it for them. Three years later, they had not yet done so and their trust was still unfunded. Result: the trust I did for them is not yet valid. If they died today, their estate would go through probate, even though they spent a couple of thousand dollars executing the trust.
Finally, another client did not make sure his niece in another state signed and notarized the grant deed transferring property into his estate, so it was not in his estate when he died. Result: the client did not legally own the property and the heirs were out of luck.
Durable power of attorney that doesn’t include the proper powers. I frequently see powers of attorney done from an internet form that don’t include the power to revoke, amend or terminate trusts. Of course, the client wants to be able to amend the trust and has no authority to do so. I see many do-it-yourself forms that are called “limited powers” but the space where the limited power is to be stated is left blank. Result: the power is not limited. Finally, the do-it-yourself forms you find on the internet don’t tell you how to sign as “attorney-in-fact ” and I’ve seen people get in trouble for simply signing the name of the principal and thinking they were signing properly as attorney-in-fact when they were actually committing forgery.
Having an attorney draft a complete power of attorney and give the principal adequate warnings about the awesome power he or she is entrusting to the attorney-in-fact is by far the safest and, in the end, cheapest way to obtain these important, and essential, documents.
Executing an Advance Health Care Directive on a standard form that doesn’t include your particular wishes or exceptions. Though these forms are adequate, I like to make sure my clients have thought about and decided on their wishes for life-sustaining treatment, so the agent doesn’t have to guess and will be required to follow the principal’s stated wishes. The standard forms have no options for the possible wishes a client might prefer, so I attach the client’s desires to my advance health care directives.
The reason I’m in estate planning is to help people. However, I prefer helping people create good planning documents that will prevent those issues that might arise from poor planning done by an amateur rather than a professional. My advice is: Don’t try to do estate planning documents yourself. The money you save by letting a qualified attorney prepare your estate plan is your own! And it can be a significant savings!