Online Estate Planning Forms: Buyer Beware!
By Candace H. Beckett
This column presents general information regarding estate and disability planning and probate. It is not intended to create an attorney-client relationship or constitute legal advice t its readers. Individuals with legal concerns should consult with an attorney for advice regarding their specific circumstances.
As an elder law attorney I have, too many times, had people come to me pleading for my legal assistance. They had purchased an online form for a will, a living trust or a financial power of an attorney that they were assured by the company’s representations was a valid legal document only to find out that it was not, usually at the worst possible time. Just last week, I had a client in my office who had purchased an online financial power of attorney several years ago. My client, the designated agent, thought everything was fine until she attempted to use the financial power of attorney to sell her mother’s home to pay for long-term care. The title company would not accept the document questioning the competency of her mother at the time the document was signed. A software program cannot determine competency; an attorney must make that determination at the time the document is executed.
It is easy to see why inexpensive estate planning forms such as wills, living trusts and financial powers of attorney have become popular. They seem to save you time and energy as well as money. Just answer a few questions, fill in the blanks, pay your fee and download your document and you are your own attorney, drafting your own legal documents. The Internet companies selling estate planning forms want you to think how easy the process is and how smart you are in reducing legal fees until there is a serious problem with your documents. When the company is contacted for help by the frustrated consumer, the consumer is directed to the “terms of service” and the “disclaimers” limiting the liability of the Internet form provider that are hidden in the contract’s fine print.
In the case of Webster v. LegalZoom.com Inc., a class action was filed in 2010 in the Superior Court of California, Los Angeles County, by the plaintiff, Kathleen Webster. The complaint alleged that “LegalZoom made misrepresentations, buried its disclaimers, and omitted material facts to its prospective and actual customers.” In this case, Ms. Webster had assisted her uncle, Mr. Ferrantino, in purchasing a living trust package from LegalZoom after he was diagnosed with cancer and was given only a few months to live. After the living trust documents were signed, Ms. Webster presented them to her uncle’s banks to have his assets transferred to his trust. The financial institutions questioned the documents’ validity and rejected the forms. Ms. Webster called LegalZoom’s customer service for the help the company had promised, but the help never came. Mr. Ferrantino’s living trust was never funded before he died. Ms. Webster, now the executor of her uncle’s estate and trustee of his unfunded living trust, had to hire an estate planning attorney to deal with the estate’s legal issues, costing her thousands of dollars. LegalZoom settled this class action lawsuit.
Internet companies are not law firms. They acknowledge this in their websites and their documents are saturated with disclaimers because the companies want to protect themselves from any liability. LegalZoom puts forth the disclaimer: “We are not a law firm or a substitute for an attorney or law firm.”
Disclaimers are not enough as lawsuits challenging the validity of online legal documents are pending in a number of states. In the case of Todd Janson v. LegalZoom.com, a federal district court in Missouri ruled that LegalZoom’s self-help document preparation service is an unauthorized practice of law.
When I look at these online estate planning document services and read of these lawsuits, I am reminded of the words of warning expressed in so many of our old adages. Foremost is: “Buyer beware!”
This also prompts me to paraphrase another adage: One size does not fit all. Everyone’s situation with respect to family structure, finances and expectations makes them unique. An attorney will know what questions to ask and what legal issues need to be addressed. This is essential to avoid fatal mistakes in your legal documents. If a serious error is made in your living trust or will, you’ll never know because it will not become apparent until you have passed away, and your family or friends are left to clean up the mess — the very people you wanted to protect.
Do yourself and your heirs a favor by having your important estate documents completed by a professional attorney. It may cost you a few more dollars now, but it will be worth your peace of mind and your heirs will be protected.
I leave you with one more old adage that seems appropriate and relevant: If it seems too good to be true, it probably is.
Candace H. Beckett JD, LLM, is an elder law attorney who was admitted to practice law in Maryland in 1989. Ms. Beckett may be reached at 410.972.4540 or 410.370.0673, or visit her website at www.chesapeak-elder-law.com