Do-it-yourself dangers

Where there’s a will, there’s a way to do it yourself with Internet services such as LegalZoom, Nolo and Rocket Lawyer. But attorneys say relying on online form providers for long-term financial and estate planning may not be the wisest investment.

The rise of online legal services is seen as a threat to lawyers’ traditional practices in a number of areas, but particularly for attorneys who handle wealth management, financial planning, and trust and estate matters. Fifteen percent of attorneys who responded to Indiana Lawyer’s 2015 Practicing Law in Indiana survey cited competition from online legal services as one of the greatest challenges to their organization’s viability.

Not all lawyers are terribly worried about that, but something else about competition from online services troubles them.

“The interesting thing is, it creates more business after somebody dies, trying to sort out the mess,” said Diane Hubbard Kennedy, an Indianapolis estate planning attorney. “If there’s any kind of complexity at all, it can just create all kinds of problems.”

Kennedy recalled representing parties in an estate where a will wasn’t valid, and it resulted in the decedent’s wishes not being met. The decedent wanted his estate to be shared equally among his children, but because the DIY will had not been properly witnessed, it was invalid, so the donor died intestate. The probate court applied the law and divided the estate between his children. But because one child had died, that heir’s share passed instead to a grandchild, which was not the deceased’s intent.

Clark

Attorney David G. Clark of the Law Offices of Canalia & Clark LLC in Munster has represented clients after do-it-yourself legal work went bad.

“I’m sure a lot of people use those things very successfully,” Clark said. “But when it goes bad, it goes really bad.” In the event of wills and trusts, “You don’t find out there’s something wrong until somebody dies, and then it’s too late to fix it.”

He recalled an heir in an estate where the decedent had improperly filled out blanks on an online form. “The will was no good,” he said. As a result, the person who made the will also died intestate and it took much longer to settle the estate.

“What we see is some people will use a form they got off the Internet instead of paying an attorney 250 bucks to do a proper will. They end up costing themselves a lot of time and money,” he said. “But people are afraid to go to a lawyer because they’re afraid it’s going to cost a lot of money.

“Most lawyers don’t charge much to do a simple will or a power of attorney. Basically the market sets the price for those things, and you get a lot of advice and counsel from an attorney that you don’t get from a form you just downloaded,” Clark said.

An attorney may advise, for example, that someone establishing a will include the words “I waive bond,” to save several hundred or several thousand dollars in fees, depending on the size of the estate.

There are also document-recording peculiarities in Indiana that estate planning attorneys are versed in that may not occur to someone relying on downloaded forms, Clark said.

Halcomb

Carmel attorney Greg Halcomb of Halcomb Singler LLP has blogged about the rise of DIY legal services. He said lawyers who handle trusts and estates may feel similarly to how financial advisers may have felt as stock-trading sites such as E*TRADE became popular.

“There’s a lot of value attorneys in my practice area can add, starting with that conversation when you sit down with the family and talk for an hour or two and find out the family story,” he said. For lawyers, it sometimes can be during that conversation when they learn of issues like a grandchild with special needs or an asset that might be difficult to transfer.

Halcomb said from what he’s experienced, many people may begin with simple estate planning documents only to discover they may need to purchase, complete and file more papers than they thought. Those costs can soon increase to rival what a client would have paid for a lawyer to do the work.

Along with improperly witnessed wills, Halcomb said he expects in future years to see many trusts established by people using DIY legal services that might not be properly funded because people didn’t fully understand the process and complete the necessary paperwork. “I think we’re going to be seeing some very disappointed beneficiaries,” he said.

Kiefer

Fort Wayne attorney Troy Kiefer of Haller & Colvin P.C. understands the desire some people may have to want to handle legal matters themselves. “I consider myself a handyman,” he said, “but I know that when I get to a certain point it’s beyond me, and I need to seek the help of a professional.

“I’m afraid that because it seems so easy online, (users) don’t know when they’re in over their heads.”

Kiefer and other lawyers said online legal form providers don’t give clients the trust they can build with an attorney, who works with them to meet their goals and

can provide the peace of mind that comes from not worrying whether all the work was done properly.

“I offer a personal relationship with clients; I don’t sell documents,” he said. “The most important thing I have to offer is getting to know a client, getting to know families, providing that personal service that online services can’t.

“These aren’t commodities,” he said of will and trust documents. “They’re highly personalized documents that are catered to the needs of each individual client and their families.”

Trimble

Lewis Wagner LLP partner John Trimble of Indianapolis has lectured around the country about the rise of alternative legal services and how lawyers need to respond and adapt. He’s concerned many aren’t getting the message.

“Uniformly, lawyers of all ages and all walks of life are ignoring the changes that are going on in our practice and are not concerned about the disruptive innovation of Avvo and LegalZoom, and they need to be,” Trimble said.

Estate lawyers particularly need to protect their practices. He suggested they use flat fees for certain planning services so clients can select from a menu, for instance.

“They need to look at how they are marketing their service and they need to focus on relationships,” he said.

Trimble said lawyers who establish relationships with clients they know from business, service, social, fraternal or religious organizations, for example, are among the best sources of referrals, and are far likelier to consume traditional legal services than to purchase them online.•