The Emergence and Danger of Online Estate Planning Tools

The marketing is clever, but always read the fine print.

There are a number of online businesses that claim to offer estate planning help, from traditional and well-known entities to newer and lesser-known entities. These businesses all have similar claims—they have attorney-prepared templates or documents available so that you can create a customized plan. That’s the basic pitch. It sounds good, but there’s a key piece that’s missing—LEGAL ADVICE!

LegalZoom’s terms of service make it clear that YOU ARE REPRESENTING YOURSELF when you do your estate plan. Their site, in microscopic font, says:

“We are not a law firm or a substitute for an attorney or law firm. We cannot provide any kind of advice, explanation, opinion, or recommendation about possible legal rights, remedies, defenses, options, selection of forms or strategies.”

Getting real legal advice matters. When it comes to ethical rules, liability claims, and liability insurance, there’s a big difference between being an attorney’s client and a business’s customer.

As mentioned in a prior blog post, we’ve had people come to us who tried to do their estate plan on their own and managed to make some pretty bad mistakes, such as disinheriting a spouse, disinheriting a child, or naming their 5-year-old daughter as an executor. Nobody at LegalZoom was there to stop those disasters from happening. If they tried to step in, they would be engaged in the unauthorized practice of law, and as they tell you, they’re not a law firm or substitute for an attorney or law firm. If the clients weren’t fortunate enough to have these mistakes rectified before they passed, there would be no recourse against LegalZoom. Their defense would simply be that they gave you the tool, and it’s your fault you misused it.

But what if I’m a financial advisor? Can I prepare legal documents?

Increasingly, online services are targeting financial advisors and inviting them to create legal documents for their clients. “Use our ‘attorney-guided’ software so your clients can complete their estate plan.” If you are not a licensed attorney and are interested in helping your clients prepare an estate plan, you should first check with the Ohio Supreme Court (or the supreme court in your state) to make sure doing so does not constitute the unauthorized practice of law. In Ohio, I am quite certain that helping clients complete an estate plan through a third party service constitutes the unauthorized practice of law, and can land you in trouble.

Furthermore, if you are a financial advisor, and documents you help clients prepare end up causing issues down the road, there is a chance you could get sued. Will your insurance cover that lawsuit?

Let’s be real here.

These businesses have popped up in response to a lot of problems that plague the legal marketplace. Some (though not all) attorneys are guilty of being slow to complete work, charging a lot, charging unpredictable amounts under hourly rate models, making mistakes, or simply not providing an easy and pleasant client experience.

Pappas Gibson strives to eliminate these pain points. We use technology to improve our services so that we can offer efficient, cost-effective, and high quality services at a fee that is fixed or known upfront.

But while technology improves our services, it is not a substitute for our services. Good estate planning advice is much more than having the right template or set of templates—it’s about knowing what questions to ask, and knowing what techniques or approaches can best achieve a client’s objectives. And it’s about knowing all of this at a deep level based on years of experience and thousands of clients served.

At the end of the day, when you need estate planning help, you need more than just “attorney-prepared” templates. You need quality legal advice so that your documents are tailored to you, appropriate for your family and financial situation, and reflective of your goals and objectives. The same way, if you need surgery, you don’t simply buy the “surgeon-designed” scalpel and perform the surgery yourself, you should think twice, or maybe even three times, before buying attorney-prepared templates and trying to complete them on your own.