By Dayo Aladeniyi, Legal Intern
In today’s world of DIY (do-it-yourself), it would seem there is no easier way to save money than DIY legal services, such as creating your will. In an effort to effectively use the new genre of e-lawyering, a forum whereby lawyers can meet clients and practice online, lawyers are presenting new software programs to help consumers perform legal services themselves. Cost is a substantial impediment for people seeking legal services. So websites such as LegalZoom and Rocket Lawyer appear to be a solution. Due to the minimized costs of these products, people think they can avoid the hassle of paying a lawyer to create a will for them. However, Consumer Reports recently did a study with LegalZoom, Rocket Lawyer, and Quicken WillMaker Plus. They found that these software programs are not an adequate substitute for having a lawyer draft a will specifically designed for each client.
Recognizing that, LegalZoom and Rocket Lawyer have disclaimers that they do not serve as substitute for the advice of an attorney. However, these obscure disclaimers do not deter consumers from using the programs as their sole legal resource. According to a review by everydaysimplicity blogspot, as long as a consumer is certain that there are no complications, then the consumer may proceed with caution. “You won’t know the quality of your legal deed, will, or incorporation documentation until they are put to the test. If you feel secure that you’re not dealing with any special issues, then LegalZoom or RocketLawyer should hopefully pass that test for you.” But how would you know if your situation is legally simple unless you are an attorney? Also, most jurisdictions do not have the same laws which may cause unforeseen complications with the programs. Even Charley Moore, Founder of Rocket Lawyer admitted that should a problem or complication arise from the consumer-drawn document, the consumer will have to consult a lawyer – which Rocket Lawyer stipulates it can provide upon request.
Apart from those problems, Legal Zoom has been facing legal issues in some states due to the legal community’s distrust of its methods. In 2008 a North Carolina State Bar committee concluded that LegalZoom was engaging in the unauthorized practice of law and sent out a cease and desist letter. A Connecticut Bar Association task force filed a report with that state’s Department of Consumer Protection claiming that LegalZoom was operating illegally. In Missouri, LegalZoom faces a class action suit. The suit alleges that LegalZoom, by offering legal documents and instructions over the Internet, is illegally practicing law. In Los Angeles Superior Court, a class action filed in May accuses LegalZoom of unfair and deceptive business practices as well as the unauthorized practice of law. The lead plaintiff, Katherine Webster, the executor of an estate and the trustee of a living trust, claims LegalZoom created a legally flawed living trust, requiring the estate to spend more than $10,000 on an outside attorney to fix the problems. The suit alleges that LegalZoom misleads customers about the degree to which its documents are customized and about their quality, compared with those prepared by an attorney.
Consumer Reports conducted a blind test on all three software programs and the results were less than satisfactory. (Taken from Clarksville Online. 28 June 2011.)
“ First a CRMA (Consumer Reports Money Advisor) reporter created profiles of individuals from three different New York families. Then, she completed the interviews as if she were those individuals, drafting nine wills in all. The wills and interview records—with product identification hidden—were sent to a law school professor who specializes in estates and trusts, who judged each product on how comprehensive the interviews were and how much information was provided, and on the overall quality of the wills. Here are a few of the problems common in all three software:
- “Outdated information. CRMA tested the products in mid-March, and two referred to federal estate-tax limits that were outdated as of January 1st.
- Insufficient customization. The products rarely referred in detail to state estate law. So they offered no guidance on how states treat wills that, for instance, fail to leave property to children born after a will is signed. (WillMaker Plus doesn’t do Louisiana wills because of the state’s unique estate laws; Rocket Lawyer provides a Louisiana will but recommends that consumers consult a lawyer.)
- Too little flexibility. CRMA found it hard to distribute property the way they wanted to. WillMaker Plus, for instance, provided arbitrary age and time limits for some provisions. The program wouldn’t let a child’s trust go beyond age 35 or set up conditions on bequests in a will, such as stipulating that a child receive money only after finishing college.
- Too much flexibility. After you finish the Rocket Lawyer interview, the program allows you to edit your completed will. LegalZoom lets you put anything you like in the special-directives section. Both features could lead you to add clauses that contradict other parts of your will.
- Incompleteness. None of the packages created a special-needs trust. Only WillMaker Plus gave information on registered domestic partnerships and included a pet trust in its main interview. None of them touched on “digital assets,” such as ownership and management of server-stored documents and photos. And none dealt with specifics on compensating executors. (LegalZoom sells a stand-alone pet-protection agreement. Rocket Lawyer says it’s adding pet and digital-assets options this summer. And WillMaker Plus 2012 will address digital assets.)
- No way to handle some tax issues. None of the products explained how to structure trusts to reduce estate-tax liability. With the current federal estate-tax floor mirrored in many state laws—$5 million per person, $10 million per couple—most people won’t have to worry about federal or state estate taxes. But some states set limits far lower. New York, for instance, levies estate tax on assets of $1 million or more.” “Write Your Own Will: Consumer Reports Monday Adviser Tests Three Software Programs.”
The money saved by using these cheaper software programs is not worth the mistakes, omissions, and situations these services might result in; mistakes that may require the family engage a lawyer when it’s too late to do anything about it. Nevertheless, a positive outcome of the emergence of these new DIY software programs is that it has made lawyers more competitive. It is now easier to find a lawyer that can create an extremely simple will that’s specifically designed for each client at about the same price as these software programs. To avoid any unanticipated complications should a consumer choose to make use of these programs, they are advised to have a lawyer review the will to ensure it is comprehensive and exhaustive. Even so, consumers should keep in mind that the DIY fees plus having a lawyer review these documents may end up costing more than simply letting the lawyer create the document in the first place.