What is Estate Planning?
Estate planning is the process of arranging how your assets will be managed and distributed to beneficiaries after death.
Will and Educational Factors
FreeWill
Freewill is a free online estate planning tool that allows users to create a simple will in under 30 minutes. The Freewill website requires the user to sign up for a free account to get started. It has a very user-friendly dashboard that takes the user through a series of questions from start to finish. In the first article, Declarations, the user is asked to provide basic information such as marital status, dependents and approximate value of assets. In this section, the user is also able to define how the assets will be distributed among beneficiaries and declare if he/she wishes to donate any gift to charity. The second article, Executor Provisions, takes the user through identifying the executors (the persons appointed to manage a deceased person’s estate). The user can choose to have a no-contest clause, a provision stating that a beneficiary that challenges the validity of the will in court will be risking their part of the inheritance if they fail to win the trial. This clause is designed to maintain family harmony and ensure that the assets is distributed according to the deceased person’s intent. The user can also choose to add a self-proving affidavit, a separate document attached to the will as a testament that the will has been signed and witnessed in front of a notary public.
After going through all the questions and provide the necessary information, the user can review and download a copy of their will free of charge. The will needs to be signed in front of a notary public to become legally valid. The testator, creator of the will needs to store the will in a safe location and inform the executors of the location so that it can be found after death. In addition, the Freewill.com website also offer tool to create other types of documents such as Advanced Healthcare Directive (a document that outlines medical treatment preferences if a person is unable to make decision due to illness), Financial Power of Attorney (a document that appoints someone else to make financial design if the person is unable to) and Beneficiary Designation (document that distributes assets not covered in will or other documents).
The FreeWill online tool is ideal for simple cases where the person does not have a lot assets but it lacks the ability to handle complex estates. The tool cannot provide personalized advice and the legal support that user would be able to get from an attorney. There is limited customization available and the form is designed to be one size fit all. The site makes money by asking the users if they wish to donate to charity and that is how it is able to offer its service for free. Thus, the users need to be cautious and avoid making any unintended decision. It is best to consult an attorney in cases of substantial assets involving businesses, and complex family structure.
LawDepot
LawDepot is another online estate planning tool that allows the users to DIY last will and testament document. Similar to FreeWill, to create a will, the users need to go through a series of questions where they are asked to identify executors and beneficiaries. However, this tool does not offer free download of the document and requires the users to sign up for an online subscription costing between $9 to $13 per month. Individual documents can also be purchased at a cost between $8 to $119 depending on complexity. There is a one-week free trial that the users can take advantage of if they are just starting out and want to get a quick free experience with estate planning. With subscription, the user can get access of many different types of documents including Power of Attorney, Gift Deed, Revocable Living Trust (a legal document that outline assets distribution to beneficiaries similar to a will but allow assets to bypass probate) and many more. Aside from estate planning, the LawDepot website also offer real estate forms such as lease agreement and quitclaim deed, as well as business plan and contract. The tool offers more customization options compare to FreeWill with a wide range of documents available. These forms are good for simple cases but again might not be suited for large complex assets. There is no legal advice or support from professional. The user can choose to contact a lawyer or attorney for additional support through LawDepot online website, but this service is not included as part of the subscription.
Rocket Lawyer
Rocket Lawyer is an online website that also offers tool for DIY will but requires a subscription. There is a free trial available for 7 days similar to LawDepot. After the free trial period, the user has the options to pay a monthly subscription of $39.99 to or $239.88 for an annual subscription which can be paid in 4 installments throughout the year. The users can fill out the last will and testament template by answering a series of questions similar to the previous tools discussed above. One interesting feature in this will template that is not offered in the previous tools is that the users are asked if they want to purchase an executor bond (a court requirement for the person appointed to manage the deceased person’s assets to purchase a surety bond, an insurance protecting beneficiaries from executor fraud) and if they would like for the executor to receive compensation for serving. There are also specific questions regarding the executor personal liability in performing the duty and if the executor is allowed handle disputes between beneficiaries. Similar to other online estate planning tools, Rocket Lawer offers convenience and speed for individual with simple assets. There is a variety to documents available for different legal needs. With DIY tools, there is always a risk of error if the user is not at all familiar with the terms used in estate planning. Personalized advice or professional support is not included in the standard subscription, and the user will be charged additional fees for the special service.
Risks of Using Online Estate Planning Tools
Online will-making tools do not offer tailored advice for different situations, and the user is responsible for understanding the terms and provisions and providing accurate information of their assets. The document is not reviewed by a professional and thus any error made by the user can lead to legal dispute and high long-term cost. The asset distribution might not be optimized for tax planning. Estate planning requires more than just simply creating a will or a document. The user needs to have an understanding of the legal processes (such as probate) involved and the timeline for when and how the assets will be distributed. This is important information that are not well explained on these online platforms. Online platforms have standard templates that are designed to be one size fit all. These templates might not be valid for all due to different state laws. Online tools will not be able to guide users through updating their will for major life changes such as getting married or divorced or loss of a beneficiary.
