PLANNING FOR WEALTH & SECURITY
By Attorneys Jennifer and Jeff Hawkins

“ESTATE PLANNING FOR DUMMIES”

Imagine if you could buy a do-it-yourself book by noted computer software guide author Dan Gookin entitled: Brain Surgery for Dummies. How about a book entitled: Bypass Surgery for Dummies? Such titles seem ridiculous, but today’s self-help society encourages people to read simple books and tackle complex projects. Some projects are more complex or dangerous than the authors let on. This trend is particularly worrisome in the area of estate planning.

Numerous and complex state and federal laws affect a people’s estates. Some people’s poorly planned estates are taxed at a beginning tax rate of 41%, or a potential tax rate of 50%, unnecessarily. Other people’s physically or mentally disabled family members require very sensitive planning. Many people need to protect their wealth from the cost of long-term care.

Don’t Ruin-It-Yourself

Most do-it-yourself books and computer software programs do not contain enough information to achieve complex objectives. For example, no software program or book can help a family protect the family farm from both of the costs of death taxes and long-term health care. Also, a self-help guide cannot protect a “Brady Bunch” family with children from prior marriages.

Self-help aids fail because they can’t handle the huge volumes of statutes, regulations, and court opinions issued by the United States and the State of Indiana each year. The Indiana Supreme Court and Court of Appeals decided 946 civil cases in 2001, many of which impacted probate and estate planning law. The main volume of Burns Indiana Statutes Annotated regarding probate, trusts, and guardianships is 686 pages long. The Indiana Medicaid program policy manual fits nicely in a four inch three ring binder and contains 1,000 pages or more. An adequately stocked estate planning lawyer’s law library costs as much as $6,000 to $8,000 per year to maintain. An estate planning lawyer should spend at least 18 classroom hours studying estate planning issues each year. How can a $60 computer software program organize that much information for an untrained person to make wise decisions and keep the information up-to-date as the law changes?

How Bad Can It Get?

The consequences of poor planning depend on the stakes. A bad plan could cause the wrong people to inherit wealth or trigger death taxes unnecessarily. An incomplete plan could miss important issues such as life support and long-term care. A lawyer can fix some parts of a defective or incomplete plan in a pinch, but the cost of curing a bad plan can be more expensive than the cost of hiring a lawyer to design an appropriate plan.

Don’t Let Others Ruin It Either

Some people stick their necks out further by letting other untrained people to prepare their estate plans for them. Several people have brought such plans in to our firm for examination and the plans were riddled with errors in each. The only thing worse than a non-lawyer writing his or her own plan is letting another non-lawyer prepare the plan.

Estate Planning Criminals

Few people realize that it is a crime to prepare a will, trust, or power of attorney for a fellow Hoosier unless you are a licensed Indiana attorney. Indiana Code § 33-1-5-1 makes it a Class B misdemeanor, punishable by imprisonment for up to 180 days and a fine of up to $1,000. Even if a person believes falsely that she can write a will or trust for another person, she is committing a misdemeanor if she prepares such documents for anyone other than herself. A misdemeanor is a crime, whereas a traffic violation, such as illegal parking or speeding, is merely an infraction. Only severe traffic violations such as driving while intoxicated or reckless driving are serious enough to constitute crimes.

Estate Planning Is For Experts – Not “Dummies”

Consider carefully whether the benefits of planning your own estate justify the risks. An old adage says “A lawyer, who represents himself, has a fool for a client.” What does that say about a person, who prepares his own estate plan without an experienced lawyer’s expertise?

THIS ARTICLE IS NOT LEGAL ADVICE.  ALWAYS CONSULT AN ATTORNEY DIRECTLY BEFORE RELYING UPON THIS ARTICLE OR CHANGING AN ESTATE PLAN.

© HAWKINS & HAWKINS LLC 2002.  All rights reserved.