The Problem with LegalZoom (And Other Do-It-Yourself Estate Planning Solutions)

by Rania Combs on January 27, 2010

RISKLegalZoom advertises itself as a cheaper alternative to an attorney. And many forgo professional advice because they are lured by the lower costs and believe the document LegalZoom creates will be just as effective as one created by an attorney. Having heard so much about LegalZoom, I recently visited its website.

At first glance, the LegalZoom site looked like it provided state-specific advice regarding Texas wills.  And had I not been a Texas lawyer who focuses on estate planning, I might have trusted that the site was providing me with accurate and current information.

But a few moments after I started reading LegalZoom’s website copy, I noticed a couple of glaring mistakes.

Estate planning laws change

Laws are not static. They constantly change because of new case law and statutes. And lawyers keep up with these changes in order to best advise their clients. LegalZoom? Not so much.

The first mistake I noticed concerned LegalZoom’s statement about oral wills. According to LegalZoom, Texas recognizes oral wills. legalzoom oral
LegalZoom is apparently not aware that effective September 1, 2007, Texas repealed Sections 64 and 65 of the Probate Code, which authorized oral wills. Under the current state of the law, Texas will not recognize an oral will unless it was made before September 1, 2007, and even then, only in very limited circumstances.

Another mistake I noticed was under the subheading “Providing for Pets.” LegalZoom stated the following:legalzoom pets LegalZoom is apparently also not aware that effective January 1, 2006, Texas enacted Section 112.037 of the Property Code which authorizes statutory pet trusts. This means that even though four years have passed since the statute was enacted, LegalZoom is still not aware of this change in the law.

Furthermore, even before statutory pet trusts were authorized, it was still possible for a pet owner to create a traditional trust to provide for a pet. A traditional trust provides for pet care indirectly by instructing a trustee to cover expenses incurred by the pet’s caretaker, the actual beneficiary of a trust, as long as the pet is cared for properly. Nowhere does LegalZoom mention this.

Details matter in estate planning

Now you may be thinking that I am blowing these little mistakes a bit out of proportion. After all, one of them concerned pets. And no one uses LegalZoom to make an oral will, so that is a harmless error.

But if LegalZoom is not current on laws about these two issues, what else has it missed? How can anyone who uses LegalZoom trust that the legal document he or she creates will do what it is supposed to do?

LegalZoom does not provide legal advice

LegalZoom does not purport to give legal advice. In fact, LegalZoom specifically states that in its disclaimer. Summarizing LegalZoom’s own disclaimer:

  1. The employees of LegalZoom are not acting as your attorney.
  2. LegalZoom’s legal document service is not a substitute for the advice of an attorney.
  3. LegalZoom does not review your answers for legal sufficiency, draw legal conclusions, provide legal advice or apply the law to the facts of your particular situation.
  4. The legal information on LegalZoom’s website is not guaranteed to be correct, complete or up-to-date.

Do-it-yourself estate planning is risky

The problem is that the documents LegalZoom creates could be completely ineffective.

People who use LegalZoom and other do-it-yourself estate planning kits end up with a false sense of security. They create documents that they believe will address their estate planning needs. But with estate planning documents, they are unlikely to discover their mistakes.

Why? Because the mistakes will not become evident until after they become incapacitated or die. And the people who will be left to deal with the mistakes are usually the people the documents were supposed to protect.

You and your loved-ones deserve the advice of a lawyer who considers the facts of your particular situation. You deserve legal advice that is correct, complete and up-to-date. LegalZoom by its own admission does not provide that.

The bottom line

The money you save now could be spent many times over after you die to address legal issues about which you were not even aware.

Attorneys don’t simply fill in forms. Rather, we use the knowledge we have acquired during our many years of schooling and practice to advise you on the best way to protect your family, and preserve and distribute your assets in the manner you choose.

Your loved-ones are worth it. Wouldn’t you agree?

Return to Texas Wills and Trust Online home page →

{ 4 comments… read them below or add one }

Donna Chmura January 27, 2010 at 12:20 pm

Could not agree more. In fact, I have blogged about why you shouldn’t use DIY services for forming corporations. http://nclawlife.com/2009/02/06/seven-things-diy-corporations/
http://nclawlife.com/2009/01/14/do-you-really-need-a-lawyer-to-form-your-corporation/

And once you’ve made some poor decisions because you were unwilling to pay for competent advice on the front end, it usually costs more to fix it on the back end.

Reply

Stephen Bloom January 27, 2010 at 2:21 pm

Excellent post. I’ve been telling clients this for years. It’s the nuances of estate planning law that will get them in trouble, and lack of understanding the legal context for the documents, like how property is titled, beneficiary designations, etc. Clients need a qualified lawyer to sit down with them and look at the big picture, or they risk not getting the results they expect.

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Leanna Hamill January 27, 2010 at 2:52 pm

Rania, the nice thing about your virtual law practice is that people can get access to the customized legal services they need, with the convenience of an on line service and at a price they can afford.

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David Errington April 17, 2010 at 10:17 pm

I am an Ohio estate planning attorney and took LegalZoom for a spin to see what they had to offer. As Ms. Combs stated, I found outdated law and misleading advice that could really cause some problems down the road. Like Stephen Bloom stated above, there is no context. For instance, you could certainly establish a testamentary trust in their will but who will be administering it? Are they aware that there will be ongoing yearly costs for filings with the probate court? Would establishing a living trust make more sense? You get the idea.

On top of that, the fee they would charge a married couple for Wills is actually not that much less than what I charge. And, by LegalZoom’s own admission, they are not providing legal advice (although I think they have actually crossed the line to UPL). As I tell people that ask me about LegalZoom, using an attorney doesn’t guarantee that it will be done perfectly, but it certainly increases the likelihood that it will be correct and, if it isn’t, at least attorneys have malpractice insurance.

Reply

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