Estate Planning in Practice: What About Online Wills?

by Jonathan A. Nelson

I have written previously about electronic estate plan documents.  Another question I sometimes get is whether wills drawn up through online sites or consumer software are legal.

 There are several layers to this answer, largely working backwards from what needs to be done with the document (and bearing in mind that these answers are specific to Virginia, although many states have analogous laws).

With regard to the legality of the will, there is not a lot of mandatory language for a document to be a will (I speak specifically as to Virginia, but this is generally true across the United States), other than there being a definite gift intended to take effect on death.  I have seen even this messed up in print-your-own wills, but it is the exception.

For the will to be admitted to probate and an executor sworn in, there are certain formalities for the signing of the document which go beyond mere notarization.  My observation is that notaries, while used to handling other kinds of documents, frequently make errors through inexperience with trying to administer a will signing.  Virginia has a “savings statute” (Va. Code § 64.2-404) that allows many flaws in the signing to be forgiven by a judge, but this requires filing a suit, and anyone who thinks they have an interest in the estate can object.  A recent example I was involved with required about $6,000 in litigation costs for a nearly unopposed matter because of the hoops that needed to be jumped through;  for contested matters, the bill goes up steeply. 

Even if the will is executed properly and admitted to probate efficiently, the software doesn't usually stop the user from making a mistake in the terms and language.  Problems with online wills I have seen include:

1.       Unfamiliarity with practicalities of the probate procedures that will apply, which may result in impractical administration, impossible gifts or failed gifts, or fiduciaries without the authority to act in a necessary or expected way;

2.       Passing assets in inefficient ways, whether this involves unnecessary probate, multi-step transactions that have tax consequences at each step, or depriving a fiduciary of the resources to maintain an asset;

3.       Failing to provide handling specific to these beneficiaries, including passing assets to minors or for the benefit of people with physical or mental limitations; and

4.       Unintentional omissions, because  the software won’t have a good way of asking you whether you thought of everything.  As one example, I was involved with an estate where the decedent used an online will program, incorrectly assuming that his widow would automatically be the first executor and he was just entering a list of alternates into the form.  Because he didn't list his wife at all as an executor, we ended up having to track down and get waivers from his sister, his mother, his college roommate, and a friend in New York he hadn't talked to in 20 years before she could qualify on the grounds of being a beneficiary.  

In the short term, writing a will with an online program may be convenient, quick, and sometimes less expensive; however, they frequently have speedbumps or full roadblocks between what they actually do and what you wanted, and fixing those problems can quickly cause significant expenses, delays, and inconvenience for your loved ones. 

Do attorneys sometimes make mistakes?  Yes.  But a personal relationship with an attorney experienced in probate and estate planning in your state and who knows your family’s needs reduces the probability, helps avoid the many pitfalls of estate administration, and provides results that are effective and sound.  Attorneys also have professional oversight that a website lacks. 

Many things in life can be fixed later, but a will is out of your hands after you are gone.

Virginia attorney Jonathan A. Nelson uses his extensive legal knowledge and trial experience to resolve conflicts, negotiate settlements, navigate compliance matters, and vigorously advocate in the courtroom in order to achieve the best possible outcomes for his clients. He practices in estate planning, probate, trust and estate administration, corporate law, and civil litigation related to these fields.

The attorneys of Smith Pugh & Nelson, PLC, offer the experienced counsel, personal attention, and customized legal services needed to address the many complex issues surrounding estate planning, probate, and trust administration. Contact us at (703) 777-6084 to schedule a consultation.

Estate Planning in Practice: Moving to a New State

by Jonathan A. Nelson

We live in a mobile society, and people change their state of residence for many reasons, including work, cost of living, family, and retirement.  When moving to a new state, do you need to do anything with your estate plan?

First, the good news: between the Full Faith and Credit clause of the U.S. Constitution and state statutes on the topic, as long as they were valid in your old state, the old will and most other documents will be recognized by the new state and given effect.

With that said, there are still aspects of the documents that are state-specific.  Some are purely procedural – a Texas will might include a direction that probate be an Independent Administration, but Virginia doesn’t have that process, so the instruction simply won’t have any effect.  Others are just questions of efficiency – for instance, a Maryland will may include a testamentary special needs trust with no ill effect in Maryland; if that will is probated in Virginia, the special needs trust will still work but could cost ten thousand dollars per year in administrative expenses which could have been avoided by having the special needs trust in its own standalone document. 

Some things can be more substantive.  As one example, Virginia permits gifts of tangible personal property in a list that isn’t executed with the same formalities as a will; however, that list isn’t itself a will, so a state other than Virginia may not recognize that list as binding.  Puerto Rico allows a successor guardian for an incapacitated adult to be nominated in a will, but in Virginia you would instead need a pre-death court order naming a standby guardian.  A gift under the Uniform Transfer to Minors Act may transfer to the child at a different age in the new state (although thanks to South Carolina’s passage of this Act three years ago, all U.S. states have at least some version of it).  Creditor claims can also be handled differently in the new state, and different provisions may be needed to keep sentimental assets from falling into creditors’ hands.

Another area that could cause difficulty are rights that supersede the estate plan documents.  A surviving spouse, for example, may have the right to make claims in the new state that disrupt what was previously a carefully balanced estate plan.  Or the new state might not extend the same rights to a nonmarital partner.  (As a practical matter, regardless of home state law I would tend to be overdescriptive in provisions involving a nonmarital partner: even traveling through a state that does not recognize the relationship may cause problems if, for example, a medical decision needed to be made after a car crash.)

Trusts can have significant value after interstate moves.  They retain much (but not all, particularly as to spousal rights) of the law of the old state, providing continuity and predictability.

When moving between states, I recommend consulting a lawyer in the new state.  He or she may advise that you do not need any changes to your documents, or may want to talk to your old estate planning attorney about differences, but either way can help fix potentially disruptive surprises before it is too late. 

It is also helpful to speak with your estate planning attorney about your documents and how you hold title if you own real estate in a different state from your residence: many of the same issues arise since that real estate would pass in an ancillary probate under that second state’s laws.

Virginia attorney Jonathan A. Nelson uses his extensive legal knowledge and trial experience to resolve conflicts, negotiate settlements, navigate compliance matters, and vigorously advocate in the courtroom in order to achieve the best possible outcomes for his clients. He practices in estate planning, probate, trust and estate administration, corporate law, and civil litigation related to these fields.

The attorneys of Smith Pugh & Nelson, PLC, offer the experienced counsel, personal attention, and customized legal services needed to address the many complex issues surrounding estate planning, probate, and trust administration. Contact us at (703) 777-6084 to schedule a consultation.

Estate Planning in Practice: When an Attorney Asks a Family Member to Leave the Room

by Jonathan A. Nelson

At all stages in life, our family members play an important role in supporting and assisting us. This can be especially true with respect to matters incorporated into estate planning documents, including emergency care, aging considerations, and ensuring that survivors are provided for financially and otherwise.  There are times when it is necessary or appropriate to use professional or corporate fiduciaries, of course, but most often, relatives who live nearby and who know our circumstances, are already involved in caring for us, and have a long history of trustworthiness are the ones named to these important roles. 

When I prepare estate planning documents, the person who will be signing the documents is my client.  In my experience, it is not unusual for a key member of the family to accompany a client to the attorney’s office for the meetings needed to set up and sign estate planning documents.  Sometimes their presence is helpful; at other times, the best way for me to serve my client is to have their family member step out of the room for a time.

Some of the reasons I might ask a relative to leave the room are below. These reasons often benefit the person being asked to leave, and may help them avoid civil or criminal liability down the road.

1. Clout (undue influence) – When a client wants to benefit a specific family member, I have to discuss this separately from that person.

2. Credentialing – Before taking information from a family member on behalf of the client, I need to find out independently the nature of that relationship.

3. Confidentiality – Attorney-client privilege is usually voided by having a family member in the room. Especially if there is a likelihood of conflict, I err on the side of caution. The last thing one wants is a family member put on the witness stand and compelled to repeat a conversation that could have been kept confidential.

4. Comfort – I may pick up an undercurrent during the meeting (e.g., a relationship has changed, previously unanticipated questions need to be asked, or unresolved disagreements exist) that are preventing my client from feeling completely secure discussing their documents or goals.

5. Competence – Similar to the undue influence reasoning, clients are best served by documents that will hold up in court. Sometimes that means confirming that the client has sufficient capacity on his or her own to execute the documents.

Most family members recognize that being asked to step out of the room for some or all of an estate planning meeting is necessary and helpful, and that ultimately they and I are both there to support the client.

Virginia attorney Jonathan A. Nelson uses his extensive legal knowledge and trial experience to resolve conflicts, negotiate settlements, navigate compliance matters, and vigorously advocate in the courtroom in order to achieve the best possible outcomes for his clients. He practices in estate planning, probate, trust and estate administration, corporate law, and civil litigation related to these fields.

The attorneys of Smith Pugh & Nelson, PLC, offer the experienced counsel, personal attention, and customized legal services needed to address the many complex issues surrounding estate planning, probate, and trust administration. Contact us at (703) 777-6084 to schedule a consultation.