The Rise of Online Legal Technology in Estate Planning - A Cautionary Tale

Technology has changed many aspects of our daily lives both for better and for worse. The internet provides a plethora of information and "form" documents that many are tempted to adopt and use for estate planning purposes rather than seeking a professional opinion. However, this is often done without realizing the legal significance of the provisions contained within these forms or the legal requirements for proper execution of estate planning documents within your state. In addition, there are plenty of scams - often referred to as "Trust Mills" - that overly complicate a client's estate planning needs for the sole purpose of charging a large fee.  Online legal services, like LegalZoom, are also getting involved with estate planning documents.  The issue with such services is that each estate plan needs to be narrowly tailored to the client and the client's particular needs which will need to be reevaluated by an attorney as their lives change.

In addition, technology further complicates what should be included in our personal estates. We typically think of our assets as including our homes, bank accounts, investment accounts, etc., but we often overlook our digital assets. Many states, including New York, Ohio, Pennsylvania and New Jersey have begun to adopt digital asset statutes. An effective estate planning attorney needs to address digital assets during planning sessions and include them within the estate planning documents. Digital assets need to be clearly identified both in the estate planning documents (will and/or trust) as well as in the financial power of attorney where appropriate authorizations need to be clearly spelled out.

Just as we plan for other aspects of our lives, like going to school, buying a home and having children, we have to plan for our families in case of emergency. If you do not have a financial or medical power of attorney, out-of-state family members cannot apply to become a guardian or power of attorney when there is an emergency or medical crisis. That means that if you are single, divorced, or a widow with no close family members or family members live out of town, then "strangers" will be making the decisions. The same principal applies for a will as well. The kiss of death from a client is hearing them say, "My children will get along after I die." This typically is a precursor for complicated estate administrations between battling children after the parent's death. Further, if you fail to plan, your estate will be handled by the state in a manner that you may not have wanted.

However, a poorly constructed or outdated estate plan can actually do more harm than not having one at all. Imagine if you forget to update your beneficiary designations following a divorce or death of a spouse and leave your life insurance to them? Or if the person designated as the executor of your will has passed away? I've also seen instances where wills have been updated but the terms are inconsistent with the beneficiary designations on retirement plans and life insurance policies. To handle this, some states now permit a change of beneficiary pursuant to the terms of the will.

The pitfalls identified above cannot be discussed, addressed and incorporated in documents taken from an online form or through services such as LegalZoom. Seeking out an estate planning attorney provides a level of security and trust which is unavailable online. That is why it is important to establish an estate plan with an attorney and then to keep it up to date as major life events occur. Technology is an effective tool for experienced attorneys to use and reference but should not be mistaken as an appropriate alternative to establishing and maintaining an ongoing relationship with your estate planning attorney. Doing so can cost you and your loved ones down the line. 2019 is calling, it's time to get it done.