Do-It-Yourself Estate Plans: Unintended Results

Sep 12, 2014

With the rise of companies such as Legal Zoom, TotalLegal, LawDepot, and, more and more consumers are attempting to create their own estate plans without the assistance of a lawyer. While it is possible to create a simple Will or other legal documents with the assistance of any of these companies or others, doing so can often lead to unintended results.

Ann Aldrich, a resident of Florida, created her own Will in 2004 using an E-Z Legal Form preprinted Will. The Will listed all her property, including her residence, Fidelity IRA, life insurance policy, car, and bank accounts and indicated it was all to go to her sister, Mary Jane Eaton. On the form, she indicated that, should Mary Jane predecease her, the assets designated in the Will should go to her brother, James Michael Aldrich. She did not indicate her intent regarding the “residuary estate,” which would consist of any assets she had not specifically designated, including any assets she might acquire after she executed the Will. Ann named Mary Jane as her primary executor and James Michael as second in line to serve as executor, should Mary Jane not be available or be unwilling to serve as executor.

Note: IRAs and life insurance policies have designated beneficiaries and therefore are not usually part of a probate estate. Therefore, even though Ann indicated she wanted these assets to be paid to her sister, if she had designated another person or entity as beneficiary on the contracts, those benefits would have been paid to the designated beneficiaries. Only if Ann had named her estate as beneficiary or if the designated beneficiary on the contracts had predeceased her without a contingent beneficiary would the Will have controlled.

As it happened, Mary Jane predeceased Ann. Mary Jane named Ann as primary beneficiary of her Will. After probating the Will, the court ordered the executor to distribute all of Mary Jane’s assets to Ann. Ann deposited all of Mary Jane’s cash assets into a new account in her name at Fidelity. She took title to the real property received from the estate in her name.

Ann never updated her E-Z Legal Will to add the Fidelity account or real property she acquired from her sister’s estate. After her death, a note dated November 18, 2008 was found with her Will. The note stated “[t]his is an addendum to my [W]ill dated April 5, 2004. Since my sister Mary Jean Eaton has passed away, I reiterate that all my worldly possessions pass to my brother James Michael Aldrich . . . She signed the addendum and it was witnessed by Shiela Schuh, the daughter of James Michael. Florida law requires that a Will or Codicil to a Will be witnessed by two persons who are not beneficiaries under the Will.

James Michael was appointed executor of the estate and the question arose regarding to whom the assets not accounted for under the E-Z Legal Will should be distributed. James asserted that the E-Z Legal Will left all designated assets to him and the note confirmed Ann’s intent for him to receive everything. Ann’s nieces, who were beneficiaries under the laws of intestacy in Florida, asserted they should receive a share of the assets that were not specifically described in Ann’s Will.

The trial court entered summary judgment for James Michael. The nieces appealed the decision. The Court of Appeals reversed, finding that the Will did not dispose of the residuary assets and that the note did not meet the requirements for a valid Codicil to the E-Z Legal Will. James Michael then appealed to the Florida Supreme Court. The Supreme Court affirmed the decision of the appellate court. In her concurring opinion, Justice Barbara Pariente wrote:

    “While I appreciate that there are many individuals in this state who might have difficulty affording a lawyer, this case does remind me of the old adage “penny-wise and pound-foolish.” Obviously, the cost of drafting a will through the use of a pre-printed form is likely substantially lower than the cost of hiring a knowledgeable lawyer. However, as illustrated by this case, the ultimate cost of utilizing such a form to draft one’s will has the potential to far surpass the cost of hiring a lawyer at the outset. In a case such as this, which involved a substantial sum of money, the time, effort and expense of extensive litigation undertaken in order to prove a testator’s true intent after the testator’s death can necessitate the expenditure of much more substantial amounts in attorney’s fees than was avoided during the testator’s life by the use of a pre-printed form.”

Had Ann included a residuary clause in her original Will, or had the note been properly witnessed so it would have qualified as a Codicil under Florida law, all of the litigation in this matter could have been avoided. While many of the estate plans created using self-help services or computer software are adequate to accomplish the desired goal, often these documents do not contain necessary provisions or are not properly executed, leading to litigation and other unintended results. These unintended results can often be avoided by consulting with a knowledgeable estate planning attorney.

Our office focuses on estate planning, probate, and trust administration. We work with clients of all wealth levels and ages. As a member of the American Academy of Estate Planning Attorneys, our firm is kept up-to-date with information regarding estate planning, estate, and trust administration strategies. You can get more information about scheduling a complimentary estate planning appointment and our planning and administration services by calling our office.

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