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Should I use an online form for my Will?

Do-it-yourself estate planning services often want you to believe that preparing a Will is as simple as filling in the blanks on a short, one-size-fits-all form. The idea of downloading a quick form that you can complete at home is appealing. And these services often provide glowing testimonials about how previous customers feel better knowing that their affairs are in order.

But what if you have questions about what might be best for your situation? What if there is a better option for what you want to do? These services provide you with a website that gives you a general overview of the law, even though the information it contains is often not guaranteed to be correct, complete or up-to-date. These services usually state that they are not a substitute for an attorney’s advice.

While these services have their place, the problem is that no two people are alike. Therefore, no two estate plans are alike. Everyone’s situation is unique. Just because the majority of a service’s customers have answered a question in a particular way, for example, does not necessarily make it right for your individual situation. If serious legal mistakes are made, you will never know because these mistakes will not become apparent until you die. And the people left to deal with the mistakes are the people you were likely trying to protect.

Consumer Reports has compared various products available, concluding that “do-it-yourself” websites are no match for a licensed attorney. Customized estate planning does not have to be expensive. I offer a complimentary consultation so that I can give you a good estimate of what it will cost to complete your legal life planning.

How often should I have my estate plan reviewed?

Estate plans should evolve and change as your life evolves and changes. Significant life changes often prompt the need to have your estate plan reviewed. Some examples might be a change in marital status, having another child, moving to another state, having a child with special needs, purchasing another home, or coming into an inheritance. Aside from significant life changes, the laws governing estate planning and federal estate tax exemption (which determines the amount you may leave to your heirs free of federal tax) change frequently.   It is always a good idea to review your estate plan every few years in order to determine what, if any, changes need to be made.

Will gift and death taxes impact my estate planning?

For 2020, you can gift up to $15,000 per person per year before you are required to file a gift tax return. This is called the annual gift tax exclusion amount. There are ways to give more than $15,000 to someone without having to file a gift tax return. You might be able to pay that person’s medical expenses or tuition directly without counting the amount you pay as a gift. You can also give as much as you want to your spouse without having to file a gift tax return.

And if you do have to file a gift tax return, you may not have to pay any tax. The amount that your gift exceeds the annual limit is applied to your lifetime gift tax exemption. The exemption amount in 2020 is $11.58 million per individual.  A married couple may be able to shield $23.16 million.

With the 2020 estate tax exemption amount at $11.48 million, few people need to worry about estate tax.  If you have an estate greater than $11.48 million, tax planning can greatly reduce or eliminate your estate tax liability. The simplest way to avoid estate tax is to give your wealth away, especially if you think you can choose charities that could make better use of your money than the federal government would. You can also use the annual gift tax exclusion to distribute your wealth to family members and others while you are still alive.  Making good use of Tax-Planning Trusts, Charitable Trusts, and life insurance policies can also reduce potential estate tax liability.