We have come across a lot of online will services in our years in business and not one of them has done even an adequate job of protecting clients properly. We just found a new one yesterday that compelled us to write this post.
What’s wrong with it?
The online services are extremely limited in their function and drafting. This new one for instance only allowed gifting to a child with one back up beneficiary. It didn’t offer any option for a contingency “disaster” clause in case all prior beneficiaries die before you. It didn’t ask if the secondary beneficiary was a minor or adult. It didn’t contain any kind of trust language at all. It only offered one option to name a single executor, and it wasn’t clear if it had a self-proving affidavit. This particular site was shared with a number of us estates attorneys because it was also signed and witnessed digitally and not by signatures on paper. Why are all these things bad, you might ask?
When we write a will, we name three levels of beneficiaries at least. The primary is often a spouse or child, the next level is the descendants of any child named, and the last is a class of people like heirs (nearest blood relatives) or a charity. It is very important to establish a disaster clause, otherwise a will ends up with a partial intestacy, which means the executor must go through several extra steps to determine who are the heirs of the testator (writer of the will).
When naming beneficiaries who are minor children, it is critical to also include trust language and identify a trustee in order to avoid an expensive guardianship proceeding. While the parents of a child are the natural guardians of a child’s person, they are not automatically guardians of a child’s estate/property. A court must appoint a guardian of an estate, which involves applications, attorneys, guardians ad litem, possibly corporate trustees, and many fees. When a child reaches the age of 18, the money and assets are released into the child’s care regardless of how much is inherited. You may end up with an 18 year old in possession of hundreds of thousands of dollars worth of cash and assets with no structure or guidance except what they voluntarily seek out.
It is also very important to include trust language to cover situations where a beneficiary lacks capacity to manage their own assets or when a beneficiary is receiving government assistance like Medicaid or Supplemental Security Insurance from the Social Security Administration. These means-tested programs don’t allow a person to have much in the way of assets and even a $3,000 inheritance will disqualify that person from their programs. Having a trust built into the will allows the person to stay in their programs and have the benefit or use of the inheritance without actually owning it.
On the executor, it is very important to name at least two if not three people who can serve as executor. People typically name a spouse or adult child as the first beneficiary, but it isn’t uncommon for the first-named executor to either refuse or be unable to serve. If the will doesn’t name a backup, any interested person can present themselves to court to ask to be appointed. While it is fine when the beneficiaries can agree on a person, it is also common for conflict to arise as to who should serve in that role. Failing to identify successor executors is a quick way to create strife and increase the cost of probate. More money for attorneys, less money for beneficiaries.
Finally, digital wills are not permitted in Texas as of this date. Wills are only valid if they are written, signed by the testator, and witnessed by two disinterested people. Signatures must be ink on paper still. A will is considered self-proved if it is also notarized with a properly worded affidavit. If it is not self-proved, at least one witness who watched the testator sign or two people who knew testator’s signature must appear in court to provide testimony regarding the will and the testator’s state of mind. Again, calling in witnesses means a more expensive probate and thus less money in the estate to distribute to beneficiaries.
As long as these online sites exist, probate attorneys across the state are going to be secure in their jobs. The cost of having a properly drafted will done by an attorney may seem daunting, but the cost of probate falls squarely on the beneficiaries until they can be reimbursed out of estate assets and it is always significantly more.
If you recognize the value of an attorney’s expertise but are unable to afford services, check with your local Legal Aid to see if you qualify for a volunteer attorney’s services. If you don’t because you earn too much, there are nonprofit legal services companies popping up that offer documents on a sliding scale based on your income. To bridge the access to justice gap in estate planning, Ms. Drake founded one such company. Visit the Linrya Justice Center, Inc at www.willsforfamilies.org to see if you qualify for sliding-scale services.