Dangers of Do-It-Yourself Wills According to Forbes

I recently ran across this article on Forbes.com about “The Case Against Do-It-Yourself Wills” and found it very informative.  The gist of the article is that DIY wills are a risky venture and the vast majority of families should work with an estate planning attorney rather than going the DIY route.  Ms. Jacobs gives several real-life nightmare scenarios as a result of folks going the DIY route.

The most interesting part of the article to me, as an attorney, is her call for attorneys to re-think how we provide our services and the fees we charge for them.  I agree that, just like every “industry,” we as attorneys should be continually reviewing the service we provide to clients, how we provide it and the fee we charge for providing it.  However, I disagree with Ms. Jacobs’ assessment on two main points:

1) I disagree that somehow the value of what we provide must be tied to the amount of time it takes us to accomplish.  Just because the “billable hour” has been the norm (and mostly continues to be), does not mean that it is a true reflection of the value we provide our clients.  To tie the fee solely to the amount of time spent on a matter is to throw my law school education, continuing education, self-study time, numerous study materials and organization memberships, and my experience out the window.  To follow her reasoning, none of that matters when it comes to setting the fee.  Although I am sure there are many who agree with her, I doubt they would agree if they had to take the time required for the initial and followup education and the “hard knocks” education, and then be told that there is no compensation for their efforts.

Here’s an analogy in the medical field – lasik eye surgery.  According to this site, the average cost of a lasik procedure for one eye is $1,580, on the low end.  And yet according to this site, the average lasik procedure only takes 15 minutes per eye.  Clearly the fee is not tied to only the time spent on the procedure.  Why?  Because there were other costs that went into the procedure.  Why should attorneys be any different?  Can you imagine an attorney charging a $1,580 fee for 15 minutes worth of work?  Makes a lawyer seem a lot more reasonably priced if you ask me.

2) The second point is really two points: her explanation of her own “basic” estate planning “package,” and Jonathan Blattmachr’s comment about software enabling attorneys to do a will in 3 minutes.  If I understand Ms. Jacobs correctly, her “basic” estate plan that cost them $4,500, included his-and-hers wills, powers of attorney, living wills and life insurance trusts.  She says “by today’s standards, we got ripped off.”  Maybe, maybe not.  If by “life insurance trusts,” she means what estate planning attorneys commonly refer to as ILITs (Irrevocable Life Insurance Trusts), then her plan was anything but simple and they definitely did NOT get ripped off.  ILITs are complex, irrevocable trusts that must be drafted in intricate detail to make sure that the “assets” in the trust are not included in your estate for estate tax purposes when you pass away.   Seeing as one slip could cost you hundreds of thousand of dollars (or more) in estate taxes, I would hardly call that “simple.”  And as for getting “ripped off,” I can assure you that if she were to go to an attorney who specialized in estate planning and was more than just a form factory, she would be looking at more than she paid back in 1997.

Jonathan Blattmachr is a very highly respected estate planning attorney and rightly so – likely one of the top in the country.  However, you have to read his statement about a “will in 3 minutes” in the context of the fact that he is talking about his drafting software and how good it is.  Somewhat of a self commercial if you ask me.  And, again, he is tying the value simply to the time spent, which seems very disingenuous as I pointed out above.  Yet here is the interesting part…if you take his numbers – approximately $600 for an “expertly drafted will and legal advice” – you still would come out near the number Ms. Jacobs gave for a comprehensive estate plan.  Hmmmm.

So what do YOU think?  If attorneys shouldn’t charge for the value they provide, how should they provide?  Why should how an attorney charges be different than other professions?  I’m very interested in your thoughts and suggestions.

Michael Lichterman is an estate planning attorney who helps families and business owners create a lasting legacy by planning for their Whole Family Wealth™.  This goes beyond merely planning for finances – it’s about who your are and what’s important to you.  He focuses on planning for  the “experienced” generation, the “sandwich generation” (caring for parents and children), doctors/physicians, nurses, lawyers, dentists, professionals with minor children, and family owned business succession – and he is privileged to do so from a Christian perspective.  He takes the “counselor” part of attorney and counselor at law very seriously, and enjoys creating life long relationships with his clients – many of which have become great friends.