DIY Planning Can Be a Nightmare!

Originally published by Rania Combs.

A couple of weeks ago, I received a phone call from a woman whose ex-boyfriend had died, naming her as the sole beneficiary and executor of his multimillion dollar estate. Despite her ex-boyfriend’s substantial wealth, he had forgone the advice of a lawyer and prepared a Will using DIY software. He told her verbally that he wanted her to use the funds for the benefit of his minor children, but his Will was completely silent on that point.

The ex-boyfriend’s goal was apparently to use his substantial wealth to provide for his children. If he had consulted an attorney, the attorney would have advised him to create a testamentary trust for their benefit. Creating a trust would have allowed him to appoint someone to manage those assets for his children, and to dictate how and when the assets should be distributed to them. This would have ensured the assets passed to his children as he wished.

He took a substantial risk when he named his ex-girlfriend the sole beneficiary of his estate:

1. Naming her as the sole beneficiary gives her legal ownership of those assets. She is not legally bound to provide anything to his children.
2. Even if she does honor her commitment, life sometimes gets in the way. Because those assets legally belong to her, they can be exposed to her personal liabilities. For example, suppose she gets in a terrible accident and seriously injures someone else. The assets earmarked for the children could be exposed to a judgment for those claims.
3. What happens she dies before the children? Since she has legal ownership of those assets, they will be part of her estate and will pass to her heirs or beneficiaries, who may not have made a commitment to care for the children.

As a result of his choice, his children’s financial future is in the hands of their father’s ex-girlfriend who has no biological or emotional ties to them.

What a nightmare!

Attorneys don’t simply fill in forms. We use our years of schooling and experience to analyze your unique circumstances, explain the ramifications of your choices, advise you on the best way to accomplish your goals and objectives, and tailor your documents to address your unique estate planning needs. Document preparation services and canned forms do not.

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.

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