Planning for Life

What's Wrong with LegalZoom and RocketLawyer?

Posted by Harry S. Margolis on January 12, 2016

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By Harry S. Margolis

Nothing. Both LegalZoom and RocketLawyer create great legal forms. They should; they have the resources to hire first-rate lawyers to draft them. But the estate planning (or corporate) document is just one product of any legal representation.

The form won't:

  • Advise you on how to fund a trust and help you do so.
  • Discuss the pros and cons and various alternatives for transferring to assets to achieve MassHealth eligibility.
  • Explain why for most people the $14,000 limit on annual gifts is irrelevant.
  • Counsel you on who to name personal representative on your will and agent on your durable power of attorney.
  • Come up with a plan to keep your vacation house in the family.
  • Refer you to a qualified and reliable financial planner, geriatric care manager or accountant.
  • Devise a plan to limit both estate and income taxes on your 401(k) or IRA.
  • Create a structure to protect your child with special needs.
  • Mediate a disagreement among your children over where you should live and what care you should receive if necessary when you get older.

The list of what lawyers do and how they can help based on their knowledge of the law and experience working with clients on 100s of matters (or 1000s for some of us older practitioners) can go on and on. This is why they are often called "counsellors" at law. While wills, trusts, durable powers of attorney and other legal documents may often seem like forms taken off the shelf, that might be produced by a well-programmed computer, we should be aware of two significant facts about them. First, the right documents and the right terms in the documents will be the result of working with your attorney to determine how best to meet your goals. Second, changing even a few words in your legal documents can have a huge impact on their effect and whether they will help protect you and your family as you wish.

So, should you devise and estate plan with the perfectly good forms you can create on LegalZoom or RocketLawyer, or should you go see a lawyer? Of course, the answer is: it all depends. LegalZoom and RocketLawyer are much less expensive than using an attorney and you can fill out their on-line forms in the comfort of your own home, even in your pajamas. If you have no complicating issues and are motivated to get your estate plan done on your own, go for it. Any plan is far better than no plan.

But if you have any complicating issues -- second marriage, long-term care planning, child with special needs, vacation home, etc. -- then meet an attorney.

The problem for many people is that they're not sure which category they fall in and are rightfully concerned that they don't know what they don't know. They'd rather avoid the cost and bother of sitting down with a lawyer, but are also not sure if the do-it-yourself programs are the answer. On the one side, they can't ask the DIY programs their questions. On the other, they're afraid that if they ask a lawyer, the billing clock won't stop. If you fall in this category, we're working on a solution for you.

Later this year, we will unveil a new website that will do the following:

  1. Help you assess whether a standard estate plan will fit your needs or whether you need to meet with an attorney.
  2. If a standard plan would work for you, permit you to choose one of two plans at a fixed price.
  3. Prepare draft documents for your review.
  4. Schedule a telephone consultation with an attorney to review your documents and answer your questions.
  5. Send you revised documents for your signature (or you can come in to our office to sign).

We'll keep you posted and let you know when the new site is live.

Topics: Estate Planning

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