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Estate Planning

Cut the Lawyer Out of Your Will?

Preset forms are fine for simple plans. But complex estate issues may require a pro.

You’ve been dragging your feet for ages on writing a will and drawing up other estate-planning documents. Now, to avoid the hassle and expense of hiring a lawyer, you’re considering using online forms to get the job done. Companies such as Nolo, LegalZoom and Rocket Lawyer allow you to do just that. Not only do they provide do-it-yourself estate-planning documents, but they also offer guidance on filling them out and general information on estate-planning issues.

The cost for such off-the-rack estate planning? As little as $50 for a simple will to $220 or so for a package that includes a will and a living trust. That’s cheap compared with the $300 a lawyer might charge for a simple will or the $1,000 or more that a comprehensive estate plan might run you. Still, you get what you pay for, says Danielle Mayoras, an estate-planning attorney and coauthor, with Andrew Mayoras, of Trial & Heirs (Wise Circle; $20 at Amazon.com). Although the products themselves may be sound, one size doesn’t fit all, says Mayoras. “They don’t address as many what-ifs as if you had an attorney with you.”

Last will and testament. Using an online will makes sense if your finances and circumstances are uncomplicated, says Joanna Grossman, a professor at Hofstra University School of Law, but “people don’t know whether they do, in fact, have a simple situation.” If you go the do-it-yourself route, be sure to have the will properly witnessed, says Betsy Simmons, an estate-planning attorney at Nolo. “You’re not done until you do all the things that make it official.”

If your situation is, in fact, more complex -- you want to disinherit a family member, say, or provide for a child with special needs, or shield a large estate from estate taxes -- consult a lawyer. (The federal estate tax was repealed for 2010, but Congress is expected to reinstate it retroactively.)

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Revocable living trust. Often used for large or complex estates, this vehicle lets you transfer ownership of your assets to a trust that you control and avoid the public process of probate when you die. If you decide you need a living trust, hire a lawyer. Trusts are, by nature, tailored to particular situations, and they have a lot of complicated rules, warns Grossman.

A lawyer will also have you fund the trust properly, which involves transferring the title on everything -- from the deed on your house to bank and brokerage accounts -- from your name to the trust. Failure to do so (a common rookie mistake) renders the trust inoperable, says David Shulman, an estate-planning attorney in Fort Lauderdale, Fla.

Durable power of attorney. This document lets you appoint a representative to manage your financial affairs should you become incapacitated. Depending on your intentions -- and state law -- it goes into effect either as soon as the document is executed or if you become mentally incompetent. In contrast, a regular power of attorney ceases to exist if you become incapacitated. It pays to work with a lawyer to make sure you use the right documents and choose the right person for this important job.

Advance directives. You need two state-specific documents:

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-- A living will, in which you specify the treatment you want to receive if you cannot speak for yourself.
-- A durable health-care power of attorney, in which you appoint someone to make health-care decisions on your behalf when you cannot.

They are available free through hospitals and state medical societies. You don’t need a lawyer to fill them out, but you should discuss the provisions with a doctor and your health-care proxy before signing the documents.