"Do It Yourself" Estate Plans Mean Risk

Attorney Virginia Hammerle has penned an excellent article, entitled, "Assuming Risk of DIY Estate Planning," for the Dallas Morning News, published online at WealthAdvisor. She writes: 

You can build an airplane all by yourself. Buy a kit or go online and download the instructions. A mere 1,400 work hours later, you should have a flying machine ready to carry you and your family into the wild blue yonder.

Aside from crashing and burning, what could possibly go wrong?

You can also do your own estate planning. Buy a set of forms or go online, download the documents, fill in the blanks and sign as indicated. A mere three work hours later, you should have documents ready to carry you through personal emergencies, sickness, dementia and death.

Aside from fiduciary theft, exploitation, guardianship, contested probate proceedings and having your wishes completely disregarded, what could possibly go wrong? [emphasis added]

We will find out. The Texas Supreme Court has just created do-it-yourself will forms.

More specifically, the court has approved four forms, categorized by type of personal situation: single with children, single without children, married with children and married without children. These are fill-in-the-blank documents. They come complete with definitions and instructions.  

The forms apply to only the most straightforward of situations. For example, the form for “single with children” presumes that you are currently single, have children and that, except for specified gifts, want to leave everything to your children in equal shares. If you want an estate plan that is more complicated, then this form is not for you.

The instructions are equally straightforward. If you make a mistake while filling in the will form, then you are instructed to rip it up and start all over again. You are instructed to fill in the information blanks either on the computer or by hand using the same pen to fill in the full form. There are several places in the form where you are directed not to “add, change or delete any words in Section …” with the explanation that the section is “needed for legal reasons.”

The legal reasons, unfortunately, are not explained in the document. You are left to do your own research.

The form contains only basic provisions, and there is no place to add anything else. Still, they are an improvement over what you usually find online, because the court’s forms contain Texas-required language to appoint an independent executor, self-prove your will and leave your entire probate estate to your named beneficiaries.

Fill it out accurately, follow the instructions and you should end up with a valid will, one that contains the bare minimum of language, and probably adequate if you have little or no estate and no family complications.

The forms can be found on the Texas Supreme Court’s website under Administrative Orders, Rules Advisories, 2023, Order 23-9022. The order was released on May 5, 2023.

If you are looking for other DIY planning forms, then visit Texaslawhelp.org. There you will find basic information on common legal issues and bare-bones forms for such things as powers of attorney and directive to physicians.

While you are researching and looking at forms, heed the warnings. The online documents are not a substitute for legal advice. They are suitable for only the simplest of estates and family situations.

You probably would never attempt to build your own plane. Even if you had the time, you likely lack the skill and knowledge. The price of failure is too high. Drafting your own estate planning documents is the same. You don’t want to crash and burn.

Of course, a bar association endorsing DIY planning begs the question, "Why?"  Aside from altruism in the form of a real desire to assist those who are able to help themselves but lack means to seek legal assistance (despite the availability of pro bono and legal aid services) there is self-interest:  busy lawyers are relieved from the burdens of turning away prospective clients unable to pay, and of taking on basic low return matters in favor of more lucrative representation, such as representing families and family members in cleaning up the spectacular mess that results when estate plans "crash and burn."  

For a real life example of how simple Wills can create problems, consider my prior blog article, "Simple Will- Complex Problems: Will Drafter Does Not Help In Case of Undue Influence."

I noted as I read the article online that there appeared an add for an online DIY Will form:

No doubt the Google Ad algorithm did not discern that the content was a warning against employing such strategies.  

For a more humorous take on the same subject, click here.

             

Fraudulent Transfer Claim Against Nursing Home Resident's Sons Survives

Nursing homes and state departments of Medicaid will become more proficient in developing and implementing techniques to pursue assets in resource recovery over time.  Accordingly, planning techniques must be more, not less, sophisticated.  An excellent exampleof just how devastating simple, self-help, plans lacking in sophistication can be, is the planning of the Nyce brothers.  A U.S. district court recently ruled that a nursing home can assert its case for fraudulent transfer against the brothers, who transferred their mother's funds to themselves, because the claim survived the resident's death. Kindred Nursing Centers East, LLC v. Estate of Barbara Nyce (U.S. Dist. Ct., D. Vt., No. 5:16-cv-73, June 21, 2016).

Roger and Kinsley Nyce were agents under their mother's power of attorney. Their mother, Barbara Nyce, entered a nursing home and signed an admission agreement in which she agreed to pay the nursing home or apply for Medicaid. Ms. Nyce filed for Medicaid, but the application was denied because the Nyce brothers withdrew money from Ms. Nyce's bank accounts to pay themselves. Ms. Nyce also transferred her real estate to her sons. Ms. Nyce died owing the nursing home $137,586.92.

After Ms. Nyce died, the nursing home sued her estate as well as the Nyce brothers individually for fraudulent transfer. The estate cross-claimed against the Nyces, alleging breach of fiduciary duty and conversion. The case was removed to federal court, and the Nyces moved to dismiss the claims. The Nyces argued that the estate couldn't sue for fraudulent transfer after Ms. Nyce died and that the estate's cross claim fits into the probate exception to federal jurisdiction.

The United States District Court, District of Vermont, denied the motion to dismiss. The court held that the fraudulent transfer claim survived Ms. Nyce's death because state law does not require that there be a pending claim in order for an action to survive. The court further holds that the probate exception cannot be used to dismiss widely recognized torts, such as breach of fiduciary duty.

The brothers plan for protecting their mom's assets didn't turn out to be so Nyce. 

Simple Will- Complex Problems: Will Drafter Does Not Help In Case of Undue Influence

The problem with a Simple Will is that it is simple.  Simple means quick, easy, and, of course, inexpensive.  But, as with all professional services, one gets what one pays for.

Attorneys typically spend little time crafting or supporting simple and inexpensive documents, meaning that the documents are often not worth the paper that they are written on.  Consider the following case, too, when using self-help document creation like on-line services such as legalzoom, where there may be no attorney involved in preparing and executing a legal document.

A New York trial court recently determined that an incapacitated woman was unduly influenced by her agent under a power of attorney, disregarding the testimony of the attorney who drafted a Will for the woman, because the attorney spent little time with the woman and failed to even determine her knowledge of her estate. Matter of Mitchell (N.Y. Sup. Ct., No. 100163/14, June 3, 2016).

Mary Mitchell appointed Gary Shadoian as her attorney-in-fact under a general power of attorney, and health care proxy.   Mary Mitchell, a municipal employee, was entitled to free legal services under a Legal Plan provided by her employer.   Mary Mitchell may have initiated the process of preparing a Will, but after poor follow-up,  Mr. Shadoian contacted the attorney on Ms. Mitchell's behalf to complete the Will. The attorney had one conversation with Ms. Mitchell over the phone and met her once in person. The attorney allowed Mr. Shadoian to be present when Ms. Mitchell executed her will even though Mr. Shadoian was a beneficiary of the will.

After Ms. Mitchell was repeatedly hospitalized, the court appointed guardians for her. The guardians filed suit against Mr. Shadoian, arguing that he unduly influenced Ms. Mitchell. At the trial, the attorney who drafted the will for Ms. Mitchell testified on behalf of Mr. Shadoian that he did not know Ms. Mitchell was incapacitated, but the attorney admitted that he had not made even simple inquiries about her knowledge of her estate.

Mr. Shadoian testified that he and Ms. Mitchell were not romantic, and not social friends, but as a co-worker, he had over time become her caregiver.  Ms. Mitchell was not close to her sisters or other family members, as they admitted, although they testified against Mr. Shadoian that Ms. Mitchell had never given gifts to anyone, never contributed to or been a member of any social organizations, and was a spendthrift unlikely to give anyone gifts or leave her estate to anyone.  

Mr. Shadoian testified that he would drive to Ms. Mitchell's apartment after work nearly every night, and telephone records reflecting scores of telephone conversations between the two were introduced into evidence. For example, between February 17, 2011 and March 16, 2011, more than 60 telephone calls between the IP and George Shadoian were reflected in cell phone records  He testified regarding the actions and efforts he made on Ms. Mitchell's behalf.  By all accounts, Mr. Shadoian was her most intimate and longest existing contact. Those testifying against Mr. Shadoian suggested that his efforts to involve himself in her life were equally successful in discouraging or preventing others from taking an active interest in her care.

The attorney was Mr. Shadoian's only other witness.

The New York Supreme Court ruled that Mr. Shadoian exercised undue influence over Ms. Mitchell. The court determined that Mr. Shadoian's testimony was not credible, and that the testimony of the attorney that prepared Ms. Mitchell's Will "was too threadbare to carry much weight." The court was critical that the attorney "failed to make even elementary inquiries as to the actual size of the estate, her medical condition, her social and familial history. Contrary to usual practice, he allowed an unrelated person, designated as beneficiary, to orchestrate the completion and execution of the will."

The testimony of the person who should have been able to testify competently and independently regarding Ms. Mills wishes and competency was dismissed.  The free Simple Will was unforceable.  Simple.

Efforts to Change Will Without Legal Counsel Backfire

Making a will without the help of a qualified attorney can be dangerous.  Trying to change an existing will on your own can fail or have unintended consequences . A recent court decision in Minnesota serves as a cautionary reminder to anyone thinking about altering their estate plan without legal advice and counsel.

Esther Sullivan executed a will in 2006, that gave half of her property to her former employee, Tara Jean Johnson. Ms. Sullivan, left a small share of her estate to Joseph VanHale, her grandson. Two years later, in 2008, Ms. Sullivan allegedly attempted to change her 2006 will by marking up a photocopy of it and writing her initials next to each change and signing and dating the bottom of each page. She allegedly wrote on top of the 2008 photocopy, “[t]he Will dated January 19, 2006 is void and to be replace[d] with this and all written in changes.” Among the changes was that Mr. VanHale would replace Ms. Johnson as the beneficiary of half her estate. In 2010, Ms. Sullivan allegedly attempted to execute another will using a form she downloaded from the Internet. This document named Mr. VanHale as her only beneficiary.

After Ms. Sullivan’s death in 2013, the probate court had to decide which of the three wills should be followed. Mr. VanHale contended that the 2010 document was a valid will, while Ms. Johnson argued for the 2006 will. The probate court ruled that the 2008 photocopy and the 2010 downloaded document were invalid because they did not comply with the state’s requirements for a valid will, which include that the will must be signed by at least two witnesses. The court held that although Ms. Sullivan probably intended to revoke the 2006 will, she did not do so successfully. Mr. VanHale appealed, arguing that Ms. Sullivan clearly intended to revoke the 2006 will and that the 2010 document was valid.

On August 17, 2015, the Court of Appeals of Minnesota agreed with the lower court that the 2006 will should be the one admitted to probate. The court ruled that only an original will, not a photocopy, can be revoked. The court also agreed with the lower court that the 2010 document had not been validly executed.

If Ms. Sullivan did change her mind and decide that she wanted her grandson to inherit her estate, the fact that she didn’t do it properly meant that far from helping her grandson, she cost him a tidy sum in legal fees. People change their minds, and circumstances can change as well – marriage, divorce, the birth of children – and estate plans need to be revised along with these changes. If you want to alter your will or another element of your estate plan, contact your elder law attorney.

To read the court’s decision in the case, In re the Estate of Sullivan (Minn. Ct. App., No. A14– 2112, Aug. 17, 2015), click here.

Estate Planning for Your Online Assets

There is no question that our real lives have more virtual reality than ever before, and executors and successor trustees are increasingly tasked with unraveling the legal disposition of online assets, accounts, and resources.   Dispensing with tedious recitation of examples from recent articles regarding the legal and practical impediments to identifying and recovering these assets, for example or retrieve email, facebook accounts, online assets such as blogs, and the like, which are appearing more frequently each day, I posit a simple question: Is there any doubt that identifying, cataloging  and planning for the disposition of your online accounts and virtual assets is preferable to simply leaving them to whichever family member steps forward to handle your estate to figure out?

To those who appreciate the importance of this type of planning, I commend the excellent infographic, Step By Step Expert Guide To Protect Yourself Online Before You Die. With advice from Evan Carroll, author of one of my favorite websites, The Digital Beyond,  and Nate Lustig,  of  SecureSafe, the infographic defines digital assets, presents the various digital estate planning services, and discusses how to leave a digital legacy. Check it out here.