What are do-it-yourself wills?

Do-it-yourself wills consist of several fill-in-the-blank forms. Some cover all bases and are easy to understand while others are confusing and missing important information. Because of this, it’s important to review do-it-yourself will forms carefully before downloading or purchasing them from a retailer. You should consider reviewing the forms with the help of an estate planning attorney. Remember, a will is a legally binding document, so any little mistake could end up being a costly one for your family.

Things to Look for in a Do-it-Yourself Will

Do-it-Yourself wills must be tailored to your state because requirements for making a valid will vary from state to state. However, even if a form is tailored to your state, it may not meet your personal requirements. Do-it-Yourself will forms are often are designed for people with very limited assets and no potential for litigation, such as a family that will go along with anything the person decides, even if it cuts out some family members.

Do-it-Yourself wills are not right for families with special circumstances, such as owning an out-of-state vacation home, having a disabled child or grandchild, or a beneficiary who has received public assistance or other forms of assistance.

Do-it-Yourself Wills and Taxes

Some Do-it-Yourself wills do not address possible federal or state estate taxes, or their impact if both spouses die at or about the same time. Federal estate taxes apply to estates valued at over $11.4 million on deaths occurring in 2019 (that amount is adjusted annually for inflation).

For federal estate tax purposes, the value of your estate is not only the property that passes by will. It also includes:

• Property that passes by joint tenancy
• The face amount of all life insurance
• The value of your IRA
• The value of your 401(k)
• The value of other retirement plans which typically pass under beneficiary designations and not the will

If you don’t take this into account, your estate could incur a large tax bill that may deprive your heirs of property they would have inherited if you had planned your estate differently.

Execution of a Will and Do-it-Yourself Forms

Even the best do-it-yourself wills can fall short, specifically with the execution of the will. A will is not valid unless properly executed in accordance with the laws of your state of residence or the state in which it was made. Some states require three witnesses in order to validate a will. All witnesses must be present when you sign the will and they must sign it immediately afterwards as witnesses. If even one of the necessary witnesses was not present, the will will be deemed invalid. If one of the witnesses is also a beneficiary, that witness may be disqualified from taking anything under the will.

Do-it-Yourself Wills and Probate Process

Do-it-yourself wills might also take longer to probate because judges may question the process used in their execution. This may result in a call for witnesses to appear in court. This will create expense, delay, and additional legal bills.

If anyone challenges the will through a “will contest,” he or she will be successful if the will was not properly signed and witnessed. As stated earlier, it is important to be very careful about which resources you choose to use, make sure you understand exactly how a will must be signed and witnessed in your state, and get advice from an estate planning attorney if you have any questions.

Case Studies: Common Pitfalls of Do-it-Yourself Wills

Case Study 1: The Inadequate Form

John downloaded a do-it-yourself will form from an online retailer. The form seemed comprehensive and tailored to his state’s requirements. However, upon closer examination, John realized that it lacked provisions for his unique circumstances.

He owned an out-of-state vacation home and had a disabled grandchild. Unfortunately, the generic form did not address these special circumstances, putting his assets and beneficiaries at risk.

Case Study 2: Overlooking Tax Implications

Sarah and Michael, a married couple, decided to create their own wills using a do-it-yourself kit. Unbeknownst to them, the kit failed to address the potential federal or state estate taxes. When both spouses passed away around the same time, their estate faced significant tax consequences. The lack of proper tax planning resulted in a large tax bill, depleting the inheritance intended for their heirs.

Case Study 3: Flawed Execution

Emily, wanting to save money, chose to execute her will without seeking legal guidance. She invited two close friends to serve as witnesses and signed the document in their presence. Unfortunately, her state required three witnesses to validate a will. Emily’s will was deemed invalid, leaving her estate without proper distribution instructions and subject to the state’s intestacy laws.

Case Study 4: Lengthy Probate Process

David utilized a do-it-yourself will that failed to adhere to the strict execution requirements of his state. As a result, the probate court questioned the validity of the will, leading to delays and additional legal expenses. The judge summoned witnesses to testify in court, further complicating the probate process and causing undue strain on David’s beneficiaries.