LegalZoom 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LegalZoom is apparently not aware that effective September 1, 2007, Texas repealed Sections 64 and 65 of the Probate Code, which authorized oral wills.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 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?

No related posts.

Lawyers use a lot words when talking about trusts, often assuming that everyone knows their meaning. But in speaking to clients and friends, I realized that many people outside the legal community don’t understand what we are talking about. Below are some of the most common terms defined:

1. Trust: A trust is a legal arrangement in which a settlor transfers ownership of his or her assets to trustee, who then manages and controls the assets for the benefit of a third person, called a beneficiary.
2. Settlor:The person who creates a trust or contributes property to a trustee of a trust. A settlor is also known as a “grantor” or “trustor”.
3. Trustee: The person or entity who manages the assets placed in trust and distributes property according to the terms established by the settlor.
4. Beneficiary: The person for whose benefit the property is held in trust.
5. Principal: The assets owned by a trust.
6. Revocable Trust: A trust that can be amended or revoked during a specific term, usually the settlor’s life. In Texas, trusts are presumed to be revocable
7. Irrevocable Trust: A trust that cannot be revoked by the settlor.
8. Intervivos Trust: A trust created by the settlor which takes effect while the settlor is still alive. It is also known as a living trust.
9. Testamentary Trust: A trust created by a will that takes effect after the settlor’s death.
10. Spendthrift Clause: A clause that prohibits a beneficiary from selling, giving away, or otherwise transferring the beneficiary’s interest, and prevents a beneficiary’s creditors from reaching the beneficiary’s interest in the trust.
11. Pourover Will: A will directing that certain assets be transferred (poured over) into a trust upon the death of the person who created the will.

Related posts:

1. Say What? Will Terminology Defined
2. Probate Terminology Defined

A last will and testament is a legal document that allows you to identify your beneficiaries, designate the way in which your property will be distributed, nominate a legal guardian for any minor children, and nominate an executor to mange your estate, pay your debts, expenses and taxes, and distribute your estate according to your wishes.

To make a valid will in Texas, you must have legal capacity, testamentary capacity, and testamentary intent. Additionally, certain formalities must be followed.

Legal capacity

You have legal capacity to make a will in Texas if you are 18 years of age or older, are or have been lawfully married, or are a member of the armed forces of the United States.

Testamentary capacity

Testamentary capacity refers to being of “sound mind”. You have testamentary capacity to make a will in Texas if you have the mental ability to understand:

• the business in which you are engaged;
• the effect of making a will;
• the nature and extent of your property;
• the persons who are the natural objects of your bounty (e.g. your relatives);
• the fact that you are disposing your assets;
• how all these elements relate so as to form an orderly plan for the disposition of your property

Testamentary intent

You have testamentary intent if at the time you sign your last will and testament, you intend to make a revocable disposition of your property to take effect at your death.

Formalities

In addition to legal capacity, testamentary capacity and testamentary intent, certain formalities need to be followed for a will to be valid. The formalities that need to be followed depend on what type of will you have made.

Texas recognizes two types of written wills.

1. An attested will is the most common type of Last Will and Testament. To be valid, it must be in writing, signed by you, or another person at your direction and in your presence, and attested in your presence by at least two credible witnesses over the age of 14.
2. A holographic will that must be written completely in your own handwriting, and signed by you. There is no requirement that it be signed by any witnesses.

The Texas Probate Code provides the person making a will with the option of adding a self-proving affidavit to the will. A self proving affidavit is signed by the person making the will and two witnesses before a notary public.

When a will is probated, the self-proving affidavit substitutes for in-court testimony of witnesses as to the validity of the will, which saves considerable time and expense.

If a will does not meet all the requirement set forth by the statutes, it will be declared invalid, meaning that your estate could be distributed according to a statutory formula rather than the way you would have preferred.

Related posts:

1. What are the Requirements of a Valid Trust in Texas?
2. Is A Will Valid If It Is Not Dated?

Lawyers use a lot of words when talking about wills, assuming that everyone knows their meaning. But from talking to friends and clients, I realized that many people outside the legal community don’t understand what we’re talking about. Below are some common commonly used terms defined:

1. Testate: Dying with a valid will.
2. Intestate: Dying without a valid will.
3. Intestacy statutes: State laws that dictate how to distribute the assets of a person who dies intestate.
4. Testator (Testatrix): A man (woman) who makes a will.
5. Will: A legal document that contains instructions about how a person’s property should be divided after death. Typically, a will also names a guardian for minor children, and appoints an executor to administer the estate in accordance with the decedent’s last wishes.
6. Codicil: A supplement, amendment, or addition to a will executed with all the formalities of the will itself.
7. Attested will: A written will signed by the maker in front of witnesses, who also sign the will.
8. Holographic will: A will that is completely in the handwriting of the testator.
9. Decedent: Someone who is no longer alive.
10. Administrator: A personal representative appointed by the probate court to oversee the winding up of the decedent’s affairs.
11. Executor: A personal representative appointed by the testator to administer the estate in accordance with his last wishes.
12. Beneficiary: A person or entity eligible to receive benefits under the will.
13. Probate: The court procedure by which a will is proved to be valid or invalid. Current usage of this term has been expanded to generally refer to the legal process in which the estate of the decedent is administered.
14. Non-Probate assets: Assets that do not have to pass through probate to be transferred, including life insurance policies, pension plans, 401(k) plans, IRA’s, joint bank accounts, payable-on-death accounts, and property owned as joint tenants with right of survivorship.
15. Per stirpes: Method of distributing an estate to a group of individuals. If a member of the group predeceases the testator, his share is distributed to his descendants.

Related posts:

1. Say What? Trust Terminology Defined
2. Probate Terminology Defined

When people think about estate planning, they generally think only about a will.

Although a will is an important part of an estate plan, it only takes effect after you die. Other documents are needed to carry out your wishes and manage your assets in the event you are temporarily or permanently disabled.

The following is a list of the basic five estate planning documents every adult in Texas needs:

Texas Last Will and Testament

A will is a legal document that directs how your property will be distributed when you die, and can create trusts for the benefit or your spouse or children. A will allows you to name a person you trust to oversee the management and distribution of your assets. It also allows you to appoint a guardian to care for your minor children.

Without a will, your assets will be distributed according to a statutory formula, which may conflict with how you would have liked for your assets to be distributed. Also, if you do not appoint a guardian for your minor children, a judge who doesn’t know you or your family may have to make that decision for you.

Texas Statutory Durable Power of Attorney

A statutory durable power of attorney gives you the power to appoint a trusted family member or friend as an agent to manage your finances if you are no longer capable of managing them yourself, such as if you become temporarily or permanently disabled.

If you become disabled and do not have a statutory durable power of attorney in place, a court-ordered guardianship may be necessary. Guardianship is time-consuming and expensive, and can be avoided by creating a power of attorney.

Texas Medical Power of Attorney

A medical power of attorney is a document that allows you to designate a trusted family member or friend to make medical decisions for you in the event you become unconscious or mentally incapable of making those decisions for yourself.

Medical powers of attorney are not just for the elderly. Unexpected injuries or illness can occur at any age, so all adults should have one in place.

HIPAA Authorization

HIPAA, the Health Insurance Portability and Accountability Act, is a Federal law that sets  rules and limits on who can look at your medical records or receive your health information. Covered entities that violate HIPAA face stiff penalties, which make them reluctant to share medical information with anyone but the patient, even close family members.

A HIPAA authorization allows you to name an individual who can have access to your medical information so that your health care provider or insurance company have no reservations about sharing medical information with those whom you have authorized.

Texas Directive to Physicians

A living will, or directive to physicians, is a document that allows you to instruct your physicians not to use artificial methods to extend your life in the event you are diagnosed with a terminal or irreversible condition.

All these documents are essential to making sure your wishes are followed and your family is protected in the event of your incapacity or death.

Related posts:

1. Where Should I Store My Estate Planning Documents?