The volume of available online information on estate and gift tax issues and advanced estate planning techniques is staggering and there is no shortage of web based services offering the sale of “basic” estate planning documents.
The consequences of using generic forms, without first obtaining quality legal advice, can be devastating. Some real world examples of costly mistakes caused by online forms or estate plans implemented without the advice of qualified counsel include:
The client signed an online power of attorney. The form did not include a grant of authority to the attorney-in-fact to make gifts. When the client became incapacitated, the family was limited in its ability to engage in estate planning to reduce the impact of federal and state estate taxes.
The decedent signed a Will bequeathing an asset to certain beneficiaries. The decedent had also signed a form purporting to give the decedent’s interest in the same asset to different beneficiaries. The cost to resolve the dispute approached the value of the asset at issue.
Before you sign any estate planning document, an experienced estate planning attorney will review: (i) the value and titling of your assets; (ii) your goals and objectives; (iii) the extent to which your intended beneficiaries require asset protection trusts or trusts which will not disqualify them for needed government benefit programs; (iv) the beneficiary designations for your non-probate assets; (v) premarital or post marital agreements; (vi) trusts created by others which grant you powers of appointment or other rights; (vii) prior divorce agreements obligating you or your estate to provide or receive benefits in the event you or your former spouse dies; (viii) prior trusts you have established; (ix) prior gifts you have made and gift tax returns you have filed; (x) the citizenship of the parties; and (xi) the complicated federal and state estate, inheritance and income tax issues.
Without an understanding of the impact that each one of these issues has on a client’s plan, a generic, fill-in-the-blank form is at best, of limited value. The actual consequences of signing a generic form can be far worse — a document signed without competent legal advice can mandate a distribution the client never intended, trigger unnecessary or increased estate, gift, generation-skipping transfer, income or capital gains taxes or allocate such taxes in an inequitable manner.