I am asked this question all of the time - in seminars, when people are calling to inquire about my services, and during the initial consultation I have with clients when we are talking about the fee.
There are a lot of answers, all of them good, but most of them do not apply to everyone. Attorneys provide added value over and above the documents they prepare. A good estate planning attorney has the experience to not only ask you the questions necessary to prepare his or her “base” documents, but also to lead you down the path of conversation to discover issues which you have often not considered. Most software programs do not adequately address the divergence of the State estate taxes (in some states affecting all couples whose total assets, including life insurance and retirement accounts, are more than 1 million dollars) from the Federal estate tax, or address how to build flexibility into the documents to deal with the changes and uncertainty of State estate taxes and the interplay between estate taxes and capital gains. Computer programs may discuss setting up trusts for your kids, but not how to fund those trusts properly with your assets (including retirement and life insurance) and how to make the trust terms work not only for your children, but for your trustees as well. Additionally, these programs do not provide guidance on the income tax impact of leaving retirement assets to your trust.
Online legal programs and software are predicated on dealing with the probable and the obvious. They have to work to the most common denominator and deal with the issues you will probably have. Working on the common denominator is fine, but a good estate planning attorney deals with the improbable. As one of my clients put it, I spend all my time dealing with the "morbid improbabilities" of everyone’s lives. Most clients think they fall into the probable category, when really most clients, singles or couples, do have unique issues that will not be addressed by looking only at the things they have in common with everyone else.
In addition, online programs cannot help with the personal conflicts that often arise regarding who should be the guardians for children and who should be in charge of the money. Attorneys, with years of experience, can help to navigate those waters, soothe emotions and offer solutions to keep everyone satisfied with the choices. This “hand holding” is very difficult to do via a computer program alone. Software programs cannot ask probing questions about how your proposed trustees work with others, or give you advice on the most important qualities for a trustee (the subject of another upcoming blog post).
Along those lines, while a computer or online program will usually create documents that will validly transfer power upon your incapacity or death, they do not do a good enough job of dealing with what happens next. How do your children get along? How well do they work together? Is there a child or family member who will create problems in every circumstance? These are not questions usually raised by the preset questions.
It is always a good idea to read as much as you can, from as wide a variety of sources as you can, regarding the estate planning process. Many local organizations offer estate planning courses, including the one I teach with my partner at Montgomery College in Rockville and Wheaton, and they are useful resources to prepare yourself before going to see an attorney. But no online program can ever replace the use of a good estate planning attorney. While programs can draft wills, revocable living trusts, powers of attorney and health care directives, they cannot coordinate them to work in harmony and cannot guide you through the absolutely vital task of making sure your beneficiary designated assets (life insurance, 401k, IRA, retirement accounts, pension, CDs, some brokerage accounts) are properly integrated into your estate plan.
As a further word of advice, every estate plan should include a Last Will and Testament, a Power of Attorney (legal and financial), an Advanced Directive (health care) and a review and revision of your beneficiary designations. If you have minor children, some kind of Temporary Guardianship document for them (for when you are alive but incompetent) is very important, and if you decide to do a revocable living trust (to avoid probate or for incapacity planning), you will need a Revocable Trust document in addition to the others, and will probably have to deed your home to the trusts. Make sure any program you use includes all of those features.
In summary, while computer programs do provide a service, with all the complexities behind the written word they just cannot answer the “what if,” “why,” and “how do I” questions that are offered by the real life experience of coordinating all your wishes with a customized and appropriate solution.