Reason 1 to Avoid Online Estate Planning Documents

The Top 3 Reasons How Online Estate Planning Documents Can Devastate Your Family and Leave Them In Financial Ruin

Reason 1: The Pitfalls of Not Getting Legal Advice from an Attorney Can Cause Your Estate Plan to be Defective Because of Wrong Heirs, Wasteful Spending, and Worthless Investments

In my last blog, I broadly identified the top 3 reasons how online estate planning documents can devastate your family and leave them in financial ruin. Over the next several blogs, I will discuss the first reason: the pitfalls of not getting legal advice from an attorney can cause your estate plan to be defective because of wrong heirs, wasteful spending, and worthless investments.

Arguably one of the biggest reasons why online estate planning documents can devastate your family’s estate plan and leave them in financial ruin is because you don’t get legal advice with do-it-yourself documents. What most people don’t realize is that the value of an estate plan isn’t just in the documents – it’s in the advice and counsel you get from your estate planning lawyer. An estate planning lawyer can identify issues that are unique to your financial and personal life that will affect your estate plan. Some of those issues might include: blended families, predeceased beneficiaries, family drug/alcohol problems, problems with the in-laws, careless spending, and Medicaid planning opportunities. This blog will more specifically address how blended family and predeceased beneficiary issues in your online documents can make the wrong heirs inherit your estate and ruin your estate plan.

Part I. The Wrong Heirs Can Ruin Your Plan

Second marriages present special challenges in estate planning. You and your second spouse may have children from prior relationships as well as children together. You may also have assets that were accumulated prior to your marriage. If you are like most people in a blended family situation, you want to provide for your spouse, but also want to ensure that your assets will ultimately go to your children and/or stepchildren. However, if you aren’t careful, your blended family situation may cause the wrong heirs to inherit your estate. For example, in Ohio, your stepchildren do not have the same legal rights as your own children. If you want your stepchildren to inherit something, you must specifically plan for them.

Furthermore, if you die and your spouse remarries, you should be concerned that your assets may pass to the new spouse instead of to your children. This can become a problem when you pass away and your surviving spouse inherits an asset as the designated beneficiary. Assets with beneficiary designations pass to the identified beneficiary outright. The beneficiary can then do whatever they want with the asset. Upon your spouse’s death, your spouse may ultimately leave that asset to a new spouse rather than to your children. Without an estate planning lawyer’s advice, your estate plan may not provide for your unique family situation and the wrong heirs can inherit your estate.

Another way the wrong heirs can inherit your estate is caused by predeceased beneficiaries. If you die without a Last Will and Testament, the state you reside in determines who will inherit your estate. Depending on the state you live in, if you die without a Will and one of your children predeceases you, that predeceased child’s share may ultimately go to your grandchildren instead of to your surviving children. One or more of your grandchildren could potentially inherit the same amount as one of your children, and that grandchild may not be old enough to responsibly manage a large inheritance. Furthermore, if you die without a Will, a child predeceases you, and you do not have grandchildren, your assets might go to your parents. If your parents are in a position where they need to qualify for government assistance, an inheritance might make them ineligible for such government assistance. An estate planning attorney will be able to review your state’s laws with you and identify the documents you need to ensure that your intended beneficiaries receive their inheritance.

In estate planning, one size does not fit all. Over the years, I have found that no two families are alike. Each family has unique issues and online documents typically cannot address those issues. If your issues are overlooked or ignored, your estate plan will probably not work the way you intended. An estate planning attorney can help you identify your family’s relevant issues and mold your estate plan to fit your specific needs.

Bill Hesch is an attorney, CPA, and PFS (Personal Financial Specialist) who is licensed in Ohio and Kentucky and helps clients get peace of mind with their tax, financial, and estate planning. He focuses his practice in the areas of elder law, corporate law, Medicaid planning, tax law, estate planning, and probate in the Greater Cincinnati and Northern Kentucky areas. His practice area includes Hamilton County, Butler County, Warren County, and Clermont County in Ohio, and Campbell County, Kenton County, and Boone County in Kentucky.

(Legal Disclaimer: Bill Hesch submits this blog to provide general information about the firm and its services. Information in this blog is not intended as legal advice, and any person receiving information on this page should not act on it without consulting professional legal counsel. While at times Bill Hesch may render an opinion, Bill Hesch does not offer legal advice through this blog. Bill Hesch does not enter into an attorney-client relationship with any online reader via online contact.)