October 4, 2010 in Investing

Do-it-yourself wills online

Generating your last will and testament can now be done by typing a few answers to questions posed on an Internet site.

By following some specific guidelines suggested by estate planning attorneys, you’ll end up with a document that should hold up in court and grant your last wishes. But first, you’ll need to shop the sites to see which one works best for you.

One of the biggest issues with any do-it-yourself legal document is making sure the wording reflects clearly what you want. When the document goes through the probate process, there should be no doubt as to who will inherit your assets and who will be the executor of your estate.

“Make sure you’re using the right form (for your situation) and answering the right questions,” says Harry S. Margolis, founder of Elderlaw Answers and an attorney specializing in elder law in Boston.

Online will sites don’t work for everyone and every situation. The best candidates for using them are those individuals with the simplest cases.

“A married or unmarried individual with an insignificant level of assets (that is, below the threshold before federal and/or state taxes kick in), who knows where his or her assets will go, knows there will be no conflict among the beneficiaries and who has a clear choice of executor will probably get a rather satisfactory online will,” says Jeffrey A. Asher, a partner in Eaton & Van Winkle LLP in New York.

Although a majority of the population can benefit from an online will, there are certain situations that warrant an attorney’s expertise. Anyone with complicated affairs or substantial assets should seek the help of an attorney and not attempt to write a will online.

When NOT to write an online will:
  • You or your spouse are citizens of another country.
  • You have significant assets.
  • You are married with minor children.
  • You’re in a gay relationship.
  • You’re raising grandchildren or stepchildren.
  • You have a disabled, dependent adult child.
  • You’ve been married more than once.
  • You anticipate your will might be contested.
  • You own a small business.
  • The online form doesn’t address your specific circumstances.

New option includes legal advice

People who reside in certain states and want to create a will online now have another option besides the impersonal online forms. Some sites offer the ease of the online will coupled with advice from an attorney on how to fill it out.

“Lawyers are late in coming to this game,” says Richard Granat, co-chairman of the eLawyering Task Force of the American Bar Association, a group of lawyers helping other lawyers figure out ways to deliver online legal services, including the writing of wills. “But recently some law firms have emerged with online wills bundled with a lawyer’s recommendations. You can e-mail any questions you have to an attorney.”

These sites are all state specific because the attorneys who offer the service can only offer legal services to residents of the state(s) where they are a member of the bar.

According to Granat, the prices for this option are relatively reasonable — sometimes as little as $30 more than the basic online will — and if it’s available to you, this is your best choice.

“Soon we will have one of these law firms in every state, and they will be marketed under the DirectLaw brand as a network of law firms offering legal forms bundled with legal advice for a fixed price,” says Granat. DirectLaw.com of Owings Mills, Md., assists law firms that want to deliver online legal services via an Internet platform.

Advantages of online wills

Cost is a big factor where wills are concerned. Online will sites typically charge in the range of $19.95 to $225. By hiring a lawyer, you might be able to secure a finished document for $500, but usually it will cost more, and the price goes up exponentially depending on how complicated your estate is, Margolis says.

If you have the answers to the online questions at your fingertips, the will can be completed quickly, often in fewer than 30 minutes, which makes this an easy alternative. With an attorney, you’ll spend time in a face-to-face meeting and then pay for the time it takes for preparation of the document. For this, some lawyers charge by the hour while others seek a flat fee.

Privacy can be a factor for some individuals. Some people just don’t want to discuss their dying wishes and health care directives with a complete stranger.

“If you feel uncomfortable talking in person with someone about personal issues, online might be the way to go,” says Margolis. “However, attorneys are required to keep your personal business confidential, too.”

According to the ABA, it doesn’t endorse any online will-writing sites. It also doesn’t take an official position concerning online will sites.

Disadvantages of online wills

One of the biggest drawbacks to an online will is that a professional hasn’t reviewed the documents, says Granat. If that worries you, hire an attorney to review what you have done online. He should be current on any new laws in your state.

However, a law could have changed without the online site updating its information. It’s also possible that the online form you choose may not be the right one for your situation.

“You are buying something without a warranty, as is,” says Granat. “If there’s something wrong with it, even with one small mistake, you’re taking a risk. But if a lawyer drafts the will, he stands behind his documents.”

Dot the i’s and cross the t’s

Following the instructions on the site carefully, signing the will correctly and having it witnessed properly all work toward making it hold up legally, says Margolis. Signing and witnessing requirements vary from state to state, so make sure you do what your state requires. Wills can be challenged if there’s a mistake or an ambiguity.

“Although you know what you want the will to say, it may not be clear to the reader,” Margolis says. “And if you take a standard will form and insert your own language, that’s a mistake.”

When searching for an online will-writing site, look for one that stands behind its documents and will give you a total refund if you’re not satisfied. Determine if lawyers are involved in the site and how long the site has been in existence. This is often stated in the “about us” section of a Web site, but you can also call and ask.

Other documents, including a health care proxy or power of attorney, a living will and “power of attorney with durable provision,” should also be available and either included in the cost or for an added fee. According to Granat, you need all these documents, not just the will.

Compare the online sites’ options and costs. You may want to choose the one that costs the most, says Margolis. “You’ll usually get more if you pay more,” he says.

Online will-writing sites haven’t been around long enough to test their rate of success. According to Granat, they won’t know until the customers who purchased these products die as to whether this is a smart way to handle a will.

Still, Granat says, “Any will is better than no will at all, providing that the will you get is appropriate for your particular circumstances.”