Friday, August 17, 2012
The problem with do-it-yourself estate planning documents is that even the simplest problems can have underlying problems that layperson would not know about. For example, Eileen Guerin Swicker, a lawyer with a practice in Virginia, told Deborah Jacobs the story of a client that created his own living trust in 1984. The client used a standard form that he obtained from a local office store. He intended to transfer his home to the trust by recording a deed to the house. However, the client mistakenly dated the deed to read 1983 a year before the trust was created. After 25 years had passed, he decided that he wanted to help pay off his daughter's mortgage to her house. The client had already paid off his own house and wanted to borrow against the house in the amount of $300,000. This is where his clerical error started to create problems. Because he dated the deed to read 1983 instead of 1984, the bank claimed that there was no clear chain of title to the house and would not give him a loan. The client, in tears, then called the old firm where Swicker used to work and asked them to fix the mistake. It cost the client $2,000 or twice what it would have cost him when he first established the trust.
See Deborah L. Jacobs, What Could Happen If You Write Your Own Living Trust?, Forbes, Aug. 16, 2012.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.