LegalDoom

Posted on August 16, 2010 by Tyler

Odds are, if you are an attorney that drafts wills, and you happen to run a blog, you’ve written something nasty and catty about “Legalzoom.” We do not like Legalzoom. If estate planners were Jedi Knights, Legalzoom would be our Deathstar.

The reasons for this are many, and you can get a full-throttled dose of Jedi Knight estate-planner  critiques of Legalzoom here, here, and here. But rather than reiterate the various problems with the giant legal document service, I thought that I would go through Legalzoom’s disclaimer to provide you a glimpse of what kind of service you get from this company.

I’ve linked to the Legalzoom disclaimer here; let’s go over the highlights together, shall we?

Right from the top:

LegalZoom is not a law firm, and the employees of LegalZoom are not acting as your attorney. LegalZoom’s legal document service is not a substitute for the advice of an attorney.

Well, at least they have the decency to remedy a misconception in the fine print. I mean, why would consumers think that Legalzoom provided legal advice? Just because the word “legal” is in the company name, and it was founded by that one O.J. attorney…

LegalZoom cannot provide legal advice and can only provide self-help services at your specific direction… LegalZoom is not permitted to engage in the practice of law. LegalZoom is prohibited from providing any kind of advice, explanation, opinion, or recommendation to a consumer about possible legal rights, remedies, defenses, options, selection of forms or strategies.

So as long you are intimately familiar with Minnesota case law involving will drafting formalities and trust formation, and you have studied the Uniform Probate Code and Minn. Stat. §524, you should be just fine. This is equivalent to saying that if you get hurt or are sick, you don’t need to talk to a doctor, just go to Walgreens.

LegalZoom’s document service also includes a review of your answers for completeness, spelling and grammar, as well as internal consistency of names, addresses and the like. At no time do we review your answers for legal sufficiency, draw legal conclusions, provide legal advice or apply the law to the facts of your particular situation. LegalZoom and its services are not a substitute for the advice of an attorney.

I’m guessing “Legalzoom: now offering Spellcheck!” wasn’t a popular company slogan with the marketing department.

I think that the above paragraph is what bothers me the most. Legalzoom advertises itself as a one-stop resource for legal services. Its commercials make it out to be an attorney-substitute service that satisfies your legal needs at a reasonable price. But its disclaimer makes clear that it is nothing more than a document warehouse. It treats major concerns like “legal sufficiency” as a trivial matter that you as the consumer needn’t worry about, so they simply bury it in the fine print. Once you get to the fine print, though, Legalzoom is very straightforward in its assertion that their documents are in many ways, legally useless.

Although LegalZoom takes every reasonable effort to ensure that the information on our website and documents are up-to-date and legally sufficient, the legal information on this site is not legal advice and is not guaranteed to be correct, complete or up-to-date. Because the law changes rapidly, is different from jurisdiction to jurisdiction, and is also subject to varying interpretations by different courts and certain government and administrative bodies, LegalZoom cannot guarantee that all the information on the site is completely current. The law is a personal matter, and no general information or legal tool like the kind LegalZoom provides can fit every circumstance.

The law is funny that way. There are “jurisdictions,” and it is pretty important that your Will follows the laws in that jurisdiction. But don’t let technicalities like state laws get in the way of your Will drafting.

I will end with this little gem:

LegalZoom is not responsible for any loss, injury, claim, liability, or damage related to your use of this site or any site linked to this site, whether from errors or omissions in the content of our site…. In short, your use of the site is at your own risk.

Confidence inspiring, no?

Photo links:
http://flic.kr/p/3p9869
http://flic.kr/p/57L3Vk
Posted in Wills | 12 Comments

Live Fast and Leave a Good-Looking Will

Posted on August 10, 2010 by Tyler
http://flic.kr/p/6BvFjh

Several of my younger friends have asked me whether they need a will or not. And I often give them the two words that all lawyers love saying: “it depends.” And it really does depend on a lot of things; so in answering a friend’s question, I consider:

  • Are they married?
  • Are they planning on getting married soon?
  • Do they own property?
  • Will they possibly inherit property soon?
  • Do they have kids?
  • Will they soon have kids?
  • Do they have life insurance or a retirement plan?
  • Do they have someone that they would like or would NOT like to make medical decisions for them?

If the answer is yes to any of these questions, then I tell them that they absolutely should have a will in place. To which they invariably respond: “yeah, I’ll get around to it.”

A will and an estate plan can do a lot of things for you; but mostly it can save you and your family mountains of time and expenses in the event that something happens to you. We estate planners understand that there are a lot of other things that you would rather spend your money on. New kitchen appliances, for instance, would be much more exciting, and hey, you can show off your new gas stove to friends! However, showing off your Will and Health Care Directive to friends would be lame, and it would be a conversation-killer.

http://flic.kr/p/5qqR7V

But kitchen appliances, while they are shiny, and can make delicious grilled bacon jalapeno wraps, don’t do the following things that a will and an estate plan can do:

  • Establish who will be your children’s guardians;
  • Lay out your medical decisions and name someone to speak for you in case you can’t;
  • Distribute property that you own;
  • Arrange for the care of your pets;
  • make delicious grilled bacon jalapeno wraps
  • Establish a trust fund for your children’s education and support;
  • Save you potentially hundreds of thousands of dollars in estate taxes.

So yes, it is often a chore trying to convince younger people why they need to arrange a will. But when I explain to them that it could save their family months of delay and potential court conflicts, not to mention help their estate avoid vast expenses, drafting a will seems worth it. Now if I could just find a way to make the documents look good in stainless steel…

Posted in Whatchoo Talkin' 'Bout Wills? | 1 Comment

Qtip: Famous Rapper or Outdated Estate Planning Tool?

Posted on August 5, 2010 by Tyler

In May of this year, new legislation was passed that affects a lot of Minnesota couples. Because most people have lives, they haven’t studied the ins and outs of their particular estate plan. But most people that have drafted a will aimed at avoiding Minnesota and federal estate taxes have a “Qtip” built into their estate plan, and they should know how this legislation affects them.

A Qtip, simply put, is a device that takes advantage of the “marital deduction” when one spouse passes away. A “family trust” shelters up to 1 million dollars tax free, and passes the rest into a “marital share.” The marital share under a Qtip would then have reduced tax liability because 1 million dollars has been shaved off the top. Estate planners prior to this year were using Qtips as nifty tools that still qualified under the estate tax marital deduction and also allowed the deceased spouse to direct how the trust property would be distributed after the death of the second spouse. These were especially useful in the cases of second marriages where the testator wanted to secure the inheritances of children from a first marriage. Qtips are also very useful in protecting assets from creditors of the surviving spouse. But now, according to the Minnesota State Bar Association, the new Minnesota legislation “purports to treat a Marital Share held in a QTIP trust different than a Marital Share distributed outright to the spouse…”

What does all of this mean for you? It means that an estate that would have passed tax free in 2009, could now be subject to over $200, 000 in estate taxes if it misuses the Qtip and marital deduction under this new legislation.[1]

The upshot of all of this is that if you have an estate plan, odds are strong that a Qtip has been built in. And if this is the case, it needs to be revised. I would be happy to work with you on bringing your estate plan current and up to speed with new Minnesota laws.

[1] Drafting Wills and Trust Agreements. Volume 1, Sixth Edition. Minnesota State Bar Association CLE. 2010.

Photo: http://flic.kr/p/6AGPYD
Posted in Death and Taxes | Tagged | 2 Comments