The Dangers of DIY Estate Planning

While the low cost is appealing, sometimes expert advice is worth the price.

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A third problem with do-it-yourself wills is the complicated world of estate taxes. For people with estates of over $3.5 million, who in normal years can expect to pay a federal estate tax, 2010 provided a temporary reprieve: Due to a quirk, the federal estate tax doesn't exist this year. But next year, barring any moves by Congress, it will return for anyone with assets over $1 million. That has led to a lot of legal maneuvering that even lawyers have trouble keeping up with, let alone people without professional help. "I think it's so completely irresponsible for anyone to suggest that people should go and write their own estate planning documents in an environment where lawyers are wringing their hands and tearing their hair out to devise a strategy for clients that will cope with the current uncertainties," says Jacobs, who spent $4,500 after her son was born to draw up her estate planning documents.

[See 2010: Cheapest Year to Die?]

Jacobs suggests using some time-saving strategies to cut down on legal costs. She suggests reading up on estate planning before scheduling an appointment with a lawyer, so you go into the meeting prepared and can skip much of the introductory conversation on estate law. If the lawyer is charging you by the hour, every minute you save is less money out of your pocket. Jacobs also says that small firms tend to be less expensive than large firms, but she adds that you want to be sure you're visiting a lawyer with expertise in estate planning.

Lastly, Jacobs suggests telling your lawyer in advance that you want to keep costs to a minimum, so they should inform you if anything will cost extra and avoid customizing documents beyond what's necessary.

DIY yourself advocates and estate planning lawyers do agree on one thing: the importance of keeping estate planning documents up-to-date. So whether you use a fill-in-the-blank form or a boutique lawyer, be sure to revisit your documents at least once a year to make any necessary changes.