Is your Estate Plan a Trojan Horse?

On January 31st of 2014, the Chinese celebrated the Year of the Horse. Which got me thinking about famous horses: Black Beauty, Secretariat, Trigger, Sea Biscuit, Silver, the Budweiser Clydesdales, Man O’ War, Pokey, and even the Trojan Horse.

That famous tale, expertly depicted in the Brad Pitt film Troy, recounts how the Greeks hid warriors inside a huge wooden horse they had constructed, left it on the beach, and pretended to sail away. The Trojans unknowingly and arrogantly pulled the horse behind their city walls as a victory trophy. After the Trojans fell asleep, the Greeks climbed out of the horse and opened the city gates and destroyed Troy. Those Greeks were pretty crafty.

trojan-horseToday the term Trojan horse means a trick that induces someone into thinking an object is useful or harmless. There are many Trojan horses in estate planning. Here are three examples.

  1. Legal Zoom documents.
  2. Ever heard the phrase “penny wise, pound foolish?” Or “you get what you pay for?” That is what I think of when I see these do-it-yourself documents that you can purchase at an office supply store or online. Although the majority of these claim they are created to conform to your specific state’s rules, most of the time they are completely deficient. They are the extremely basic in instruction and do not cover a variety of situations.

    These documents are a Trojan horse because people believe that since they have created estate planning documents, they and their families are well protected. Nothing could be farther from the truth. In some cases, no planning at all would have better protected their family.

    I often hear, “I have a trust so my assets are protected.” No they are not. A revocable living trust provides no asset protection to the trustmaker. Or “I have a will so my family won’t have to go through probate.” Untrue. Whether or not your family goes through probate depends on what assets you have that are probate assets- regardless if you have a will.

    Your family and life is not simple and basic. Your estate planning documents shouldn’t be either.

  3. The Internet, Social Media, and your neighbor down the street.
  4. When I do public presentations I tell the audience that other attorneys are not my competition. My competition is your neighbor, hairdresser, or the Google search your son did. Why? Because people seem to readily believe any “legal” information they hear, regardless of the source. The problem is much of the advice is horrible, or because the facts or law would not apply in your particular circumstance.

    I recently saw a post on Facebook that stated how she recently wrote a letter to her sister telling her she would like her sister to raise her children should something happen to her. Several people chimed in on how great an idea that was so that a judge wouldn’t decide. Not true, a judge will still who raises this woman’s child because in Arizona the only place to name a legal guardian for your child is in a properly executed will.

  5. Documents prepared by non-estate planning attorneys, paralegals, or document preparers.
  6. As an estate planning attorney, I am smart enough to know I shouldn’t review a real estate transaction contract. Or defend medical malpractice lawsuit. Or prepare corporate merger documents. These are not my areas of specialty.

    Last week I heard of a non-estate planning attorney who created a revocable living trust for a couple. The trust was fraught with errors that had major tax consequences as the successor trustee was not a US resident or citizen. The attorney likely did not know that was huge mistake. The client did not know that had a trojan horse.

    When I had a partial retina tear and needed eye surgery, I didn’t go see my family nurse practitioner. I went to a surgeon who specialized in eye surgery.

Your estate planning documents should be created by an estate planning attorney. Period. Otherwise what you have is likely a Trojan horse, inducing you to think that the documents are useful, when in reality they may open the gates to the court system.