On February 6, 2016

The risks of online, DIY trusts

The risks of online, DIY trusts

The internet puts a world of information and opportunities for action at our fingertips. In the estate planning realm, this can mean that internet users may be able to develop trusts (and other estate planning documents) online.

While these online, do-it-yourself (DIY) legal services may seem appealing – in terms of cost and the ease of getting the task completed, however, there can be some big risks involved.

And understanding what these risks are can help you make the right decisions when it’s time to formalize your estate plan to protect your legacy and loved ones.

Risks of Online DIY Trusts

The main reason that online DIY trusts are so risky is that these documents are usually developed from generic forms (in order to be widely applicable and to try to limit the room for user error). While relying on a generic form to develop a trust may seem harmless, the facts of the matter are that these online trust documents will:

  1. NOT account for your specific or unique circumstances or needs – Do you have a child or loved one with special needs? Are you a business owner? What are your specific goals in developing a trust? Understanding these factors (and others) can be integral to choosing the right type of trust and developing that trust to provide the appropriate protections. Online services simply won’t provide this level of personal attention or service, and that can end up meaning that a DIY trust does not end up doing everything you need and/or expect it to do later.
  2. NOT provide legal advice – Developing trusts can bring up issues of funding the trust, administering the trust and/or developing other estate planning documents/tools to support the trust. At any point along the way, DIY services will not indicate where you may be making potentially costly mistakes or where you may be missing opportunities (to save on estate taxes, help your loved ones avoid Colorado probate, etc.).
  3. NOT necessarily be effective or enforceable later – And this may be the single most important reason to avoid online DIY trust services, as the trust documents you develop via these services may not do what you want them to later. That’s because, for instance, these documents may be extremely watered down or may even be invalid (in light of your state’s laws). And that can mean that the few bucks you saved upfront in developing the DIY trust can end up costing your loved ones a lot more  in the future.

The Bottom Line

When it comes to online DIY trusts (and other estate planning services), the bottom line is that:

  • You get what you pay for, and cutting corners in the process can have big impacts in the future.
  • The mistakes and problems associated with online DIY trust are often not realized until it’s too late, a death has occurred and the survivors are paying the price (via, for instance, probate, estate taxes, etc.).
  • Working with an attorney in the estate planning process can be invaluable, as it can ensure you develop effective, valid trusts/

Contact a Denver Estate Attorney at JR Phillips & Associates, PC

For experienced help developing trusts or making other estate plans, you can turn to the trust attorney at JR Phillips & Associates, PC. We provide a thoughtful, comprehensive approach to our clients’ estate planning, elder law and other legal needs, and we take pride in helping each of our clients and their families find the best solutions for them.

Call us at (303) 741-2400 or email us using the contact form at the top of this page to find out more about your best estate planning options.

From our offices in Denver, we serve clients throughout the southwest and southeast Metro Area, including (but not limited to) people in Highlands Ranch, Littleton, Castle Rock, Parker, Aurora, Greenwood Village and Englewood.

Categories: Estate Planning, Trust Administration, Trusts