Q: I have been approached by a business firm that provides financial advice. They propose to do financial and estate planning for me, which includes the preparation of documents. I am worried about the “estate planning” part of that proposal since the individuals I would be dealing with are not attorneys. Should I be concerned?
A: Your concern may be warranted and certainly is understandable. Estate planning is a very important process and usually involves a host of crucial and often complex documents, such as wills, trusts, powers of attorney and deeds. The creation of these documents usually is best left to attorneys who practice in this area.
It has become somewhat common for financial planning businesses to enter the “estate planning” arena. The benefit to these companies is they are more likely to get, or retain, your financial planning business and hence the ability to manage your investments. Most of these firms are very capable of providing investment advice and offer financial planning.
Dangers, however, can arise when these businesses help clients with the actual drafting and execution of documents. A major red flag pops up if it becomes apparent the individual responsible for drafting is a non-attorney. Estate-planning attorneys like to share horror stories of company-produced documents that range from mildly defective, to dangerous, to “over the top” in unnecessary complexity and poorly-adapted scope.
Even more common and significant problems can arise from “do-it-yourself” estate planning forms that exist on the Internet. In addition to possibly failing to achieve their stated purpose, these documents can result in unexpected and regrettable consequences.
For instance, a poorly drafted will may cost your family considerably more money during the probate process or even result in unnecessary probate when these costs could be avoided by careful drafting and planning in the first place.
Interesting examples of poor estate planning abound in the news. Former Tennessee Titans Quarterback Steve McNair is a prime example. McNair’s lack of an estate plan resulted in disputes over how he intended to distribute his property and exposed intimate details of his life when alleged children born out of wedlock entered the potential inheritance picture. Additionally, a staggering amount of his estate unnecessarily went to the IRS.
As noted, there are many very important issues to consider when planning your estate. Those issues surround both planning for the rest of your life and then making determinations regarding what will happen following your death.
