by Bert Griffin
As a financial planner, I regularly advise my clients on a range of financial planning subject matters, from retirement planning to investment planning to tax and estate planning. In order to create a truly solid financial footing, I urge my clients to consider and discuss every one of these financial topics. However, for the purpose of this article, I would like to speak to the latter of the list – namely, estate planning.
You may already know what estate planning is, but, for the purposes of clarity, I’ll provide a basic definition. To quote my website, estate planning is the development of “… a plan for the efficient handling of [one’s] estate in the event of death”. And as an added note, typically this development involves the legal execution of estate documents, such as Living Wills, Powers of Attorney, Living Trusts and arguably the most commonly executed estate document, the Last Will & Testament.
When I discuss the topic of estate planning with my clients, I’ve noticed in recent years that an increasing amount of them will respond by asking my opinion of online legal document preparation companies, and whether or not I recommend their use. If you are unfamiliar with the concept of online document preparation companies, in the past ten years or so – or essentially since the inception of the digital marketplace – online businesses have sprung up that fill the need of providing legal documents to consumers through the medium of a website.
Essentially what happens is this: when a customer ants to have a legal document prepared, say for example a living will, instead of going to a lawyer to have the document drafted and executed, the individual will go to the website of an online legal document preparation company. The customer will then enter in their personal information (name, address, phone number, etc.), in addition to any legal information particular to the document they want prepared (say, for example, if the customer would like to have a living well prepared, they will enter in whether they want to have life support or not), and once the customer has provided all pertinent information, the online company then prepares the form, personalized with the customer’s information, and mails it to the customer for his or her signing and legal execution.
So, what’s to make of the entrance of these online document companies? Well, foremost, I can confidently predict that with the ever-increasing influence of the digital marketplace, the influence of these online companies in the legal world will only grow. But, that still leaves financial planners, like me, with a very privy question: namely, should we recommend that our clients use these online companies as a way to create and execute their estate documents?
Well, at the risk of sounding on the fence, instead of answering this question with a yes or no, I’d like to highlight a few of the positive aspects of these companies, as well as some of their drawbacks.
First, it has to be said that the biggest advantage to using an online source to prepare a legal document has to be the cost to the customer. Simply put, having a document prepared by an online business comes at a fraction of the cost as compared to having an attorney prepare a legal document. And if a client is looking to have several estate planning documents prepared at one time, the savings online companies offer can be truly significant.
Besides savings, these online businesses also offer convenience. Let’s face it – most people would rather be doing something else other than creating and drafting legal documents. So, the convenience of being able to create an estate document from the comfort of one’s home really goes a long way to motivating people to actually have their estate documents drafted and executed.
But, not everything comes down to savings and customer convenience. After all, having a legal document prepared conveniently won’t matter much if the document turns out to be legally invalid. So, as a counterpoint, I think it’s important to mention that when working with online document preparation companies, the legal accuracy and quality of their documents must be carefully considered. Background research on whichever online firm is chosen is very important. And if the research reveals that the company has a track record of providing legally invalid documents or documents that have not been updated to reflect the most current provincial or national laws, then this may be a serious red flag.
In the end, I would recommend that prior to deciding to do business with an online legal document company, research should be done on the company’s track record; and for those individuals who have particularly complex estates or complex legal matters relating to their estates, it may be best to stick with a good old, traditional attorney.