The trouble with lawyers

The legal boys have won again
And you and I have lost
They can’t tell us how it happened
But they’ll let us know the cost

Elton John – Legal Boys

When our Last Will and Testament service is complimented for its convenience and affordability I feel a sense of pride, but I have to quickly follow up by explaining that our service is not only used by people who “cannot afford expensive legal fees”. It turns out that there is also a growing band of users who turn to our service because they simply don’t want to use a lawyer; they don’t like lawyers, and they don’t trust lawyers to give them a fair deal. The decision to use our service is not about cost; these people could afford to use a lawyer if they wanted to, and they could probably find the time to book an appointment, but it’s a general dislike of the profession. Of course, at LegalWills, we value the expertise of the legal network, and we often direct people to receive professional advice if their situation warrants it, but what is it with this distrust of lawyers? It seems that the legal profession need a PR makeover.

 

I was reminded of this recently when reading an article on the Canadian CBC website about the disgraced lawyer, Richard Chojnacki, who stole from his clients. The Law Society knew about it for six years, but did nothing. They have been accused of protecting one of their own, even as people were being robbed of their savings. Many lives were ruined unnecessarily as the Law Society sat on their hands, causing “6 years of hurt”. But the story wasn’t the main interest to me, rather it was the comments section. It reflects a public discontent with the legal profession;

“lawyers who are obviously accustomed to dragging things out for billing purposes”
“There is a reason why lawyers have a bad reputation and are hated”
“Who would have thought — a dishonest lawyer?”
“It is said that sharks will not eat lawyers as a professional courtesy”
“99% of all lawyers make the rest of them look bad”
“a lawyer who is dishonest and corrupt. Shocking!!!!”

The list of comments goes on. In fact, when I quickly looked up the list of the ten most distrusted professions, lawyers were sixth on the list, just behind psychics and ahead of car mechanics. There are also countless websites dedicated to “lawyer jokes” reinforcing that perception.

I am sure it was this story that prompted the Toronto Star to start its “Broken Trust” series of investigations into lawyers-turned-criminals, the headline of which is “The Toronto Star found that more than 230 lawyers sanctioned for criminal-like activity by the Law Society of Upper Canada in the last decade, stole, defrauded or diverted some $61 million held in trust funds for clients.”

I’m not sure that lawyers are any more dishonest than any other profession, maybe we hold lawyers to a higher standard because we trust them with our most personal affairs. However, there is certainly a justified perception that some lawyers will try to make as much money as a situation permits, and charge for every possible item. You only have to look at the Nortel bankruptcy in Canada where the legal arguments over how to split $7B in assets have moved the case no closer to a resolution than it was 5 years ago. It’s just the the $7B is much smaller now because $1.2 BILLION has been eaten away in legal fees. Just imagine how that kind of legal bill can be amassed; either a huge number of lawyers, or an unconscionable hourly rate.

I’m not sure when this distrust of the profession started, but in 1852 Charles Dickens published Bleak House, the story of a dispute over a Will which culminates in the estate being swallowed completely in legal fees. The inspiration for the story came from Dickens’ disillusionment of the legal community after working both within the system as a law clerk, and then working with lawyers to protect copyright of his work.

People come to us because they have been quoted as much as $1,200 for a “simple” estate plan. Other clients have come to us because some lawyers refuse to provide a quote claiming that it is impossible to say how much a Will is going to cost until is has been completed. These attitudes put people off, and that is why they are turning to services like LegalWills.ca, LegalWills.co.uk and USLegalWills.com. We can at least tell you that a Will costs $34.95 or £24.95, and we’ve paid the expensive lawyers to create the service so that you don’t have to.

Although our service works for the vast majority of people, some people still need legal advice to create their estate plan. We will always direct people to professionals when our service is not appropriate for their situation. I just wish the legal profession did a better job of presenting themselves to the public.

 

Fear and loathing of our Will service

There are generally two different reactions to our legal Will service and yesterday we experienced both. A lawyer tweeted yesterday about our service “Danger, Avoid”, and then an hour later somebody called into our customer service line and said “my mother had a Will written up when she was 85 and was charged $700, we have just re-done it using your service and it was almost verbatim compared to the $700 Will”. Let’s explore these two reactions.

The lawyer didn’t give too many details as to why our service was dangerous, or why it should be avoided, so we’ll have to make some assumptions. Let us assume that the lawyer felt that reducing the process of preparing a Will to a series of algorithms presented in a software package is an over-simplification – to some extent the lawyer may be correct. But what we do know is that it is actually quite unusual for a lawyer to hand-craft a new legal clause to go into a Will, most Wills drawn up by legal professionals are cut and pasted from known precedents. In fact, if you step into a lawyer’s office, you will be asked to complete a blank form, that is then punched into some software, and a Will is generated. In most cases the process is actually exactly the same as what we do. That is not to say that there can be fine-tuning of assets to lessen probate charges and tax liabilities, and more complex estates can benefit significantly from legal and financial advice to reduce the burden of those charges. But for many people the perceived advantage of this guidance is offset by the expense and inconvenience of seeking the advice.

Of course, if a special clause is required, or legal advice is needed, then we would always direct people to a legal professional, and under those circumstances, high legal fees may be warranted. However, in most cases, the process for creating a standard Will is actually far less complicated that filing one’s taxes, and I can imagine a decade or so ago, professional accountants having the same reaction to tax preparation software; “how can you reduce our expertise to a series of Q&A’s in software” but Intuit did it, and it has now become the go-to resource for most people. It is inevitable that more people will turn to software to prepare their Will given their experiences with dealing with legal professionals. And with that, let’s look at the other reaction.

Too often we hear of egregious over-charging by estate planning lawyers and this is ultimately what makes the service at LegalWills.ca, LegalWills.co.uk and USLegalWills.com so successful. We hear of people needing to change the name of their Executor on their existing Will, and being charged in excess of $500 to do this. We hear of 85 year old seniors, who simply want to leave everything to their daughter, being charged $700 for a simple Will.

I think it’s only fair to offer the other side to this discussion. Why would a lawyer charge $500 for what appears to be a minor update? The argument appears to be that the lawyer would effectively have to create a brand new Will because it is conceivable that laws or personal circumstances may have changed since the original Will was written. However, when the new Will looks identical to the original, people justifiably feel ripped off.

We are therefore left with a situation where 60-70% of people do not have a Will, and of those that do, most are not kept up to date. It is a document that everybody should have, so we clearly have a broken system.

We believe that our service currently addresses the needs of about 70% of the people needing a Will. It would be relatively straightforward to build software that could address the needs of 99 percent of the people needing a Will. There will of course still be a need for legal advice from trained professionals, and the hand-crafting of novel and unique legal clauses. But we do feel that the days of charging $600-$900 for a standard Will are thankfully drawing to a close.

For every complaint from the legal profession, we receive fifty thank-you’s from people who have used the services at www.legalwills.ca, www.legalwills.co.uk and www.uslegalwills.com. We feel that we offer a vital service and that for the vast majority of people, the end product of our service is every bit as good as a Will drawn up by a legal professional.

“How come your Wills are so cheap?”

This is one of the most common questions we are asked; “how is it that if I go to a professional Will writer – a solicitor or lawyer, they will charge me 20 times your price?”. How do we make your service so affordable?

I think the most important factor is our sense of value for money. All too often we see lawyers writing online about a professional estate plan costing “as little as $1,200”. Even the most conservative estimates are in the range of “only $400-600″. To us, that seems like an outrageous amount of money. We’ve seen articles, written by lawyers saying “If you’re using a will kit because you’re too cheap to pay for legal advice”, which I think really demonstrates the disconnect between those paying for the service and those offering the service. It’s not a matter of being too cheap, it’s a matter of simply not being able to afford it.

This is why the Chief Justice of Canada, the Right Honourable Beverley McLachlin noted, while addressing a room full of law students;

“the justice system…has failed thousands of Canadians who don’t have a legal will, simply because they do not have the money to hire a lawyer to draft one or are so afraid that what it will cost will bankrupt them”

We think it’s a disgrace that nearly three quarters of adults in the UK, US and Canada do not have a legal Will. This number should not be 70%, it should be nearer to 5%. It doesn’t make sense that a relatively simple document should be the exclusively the purview of legal professionals. Occasionally, a complex estate plan does require legal advice that draws upon the years of training and experience of a legal professional, but the legal profession know that no legal knowledge is required in the drafting of the vast majority of Wills. But this won’t stop them from scaremongering and sharing examples of how it can all go wrong. Take this example;

Many people unfortunately believe they can create their own will based on a legal (service) they located on the Web. These individuals need to realize that their estate probably does not simply consist of a bank account and a home. Many estates today could easily include additional real property (real estate), jewelry, a baseball card collection, first edition Nancy Drew books…

What on earth is this saying? how does a Will written by a legal professional for $600 cover these items any more thoroughly that an online service. In fact, we would argue that if you are including these items in your Will you SHOULD use an online service – it allows you to update your Will free of charge every time a change is made to your inventory. Otherwise you’ll be returning to the lawyer each time you buy a new first edition Nancy Drew book – the cost of an update – $500.

Writing the Will yourself can also protect you against immoral thieves like this woman.

The former solicitor and District Court judge, Heather Perrin, received her second jail sentence for deceiving her clients. Having been found guilty in November of tricking her elderly friend, Thomas Davis, into bequeathing half of his €1m estate to her two adult children, she pleaded guilty to falsifying another client’s account, for her own gain

Our services at LegalWills.ca, USLegalWills.com and LegalWills.co.uk allow you to write your own Will, from home, and guides you through the process. You learn about the contents of your Will, and the things to consider. You can update it at any time, and it will cost you $34.95 in the US or Canada, or £24.95 in the UK.

If it was up to us, the government would offer our website as a public service to ensure that everybody had a Will in place. In the meantime, we cover our costs and hope that we can make the process accessible to as many people as we can.

My Life Locker

I read a great article last week entitled “10 minute guide to estate planning“. The article starts by framing the problem; everybody knows that they should have their estate planning in place, but only 44% had done anything about it, but then the article strips away the complexities and conveys three simple messages; Get life insurance, prepare your estate planning documents, and then “Create a Master Document for Your Loved Ones”. We’ve discussed at length the creation of the estate planning documents in previous articles, and a Will, Power of Attorney and Living Will can be created easily and inexpensively at www.legalwills.ca, www.uslegalwills.com and www.legalwills.co.uk, but it was the reference to a master document for your loved ones that I found really interesting.

The article describes the master document as

An important aspect of estate planning involves sitting down and listing all of your assets and debts. Next to these items, state everything you want done to close them out and to put the assets in the hands of the people who you wish to have them… This document can be a tremendous help to your grieving family who may end up disagreeing about who gets what, when and how.

It makes complete sense to do this, but very few people do because it’s actually more difficult than it seems. However, recently I was fortunate to meet Sandra Tisiot, the creator of My Life Locker. I think Sandra may be the best person to introduce My Life Locker to you….

My Life Locker is perfect solution for organization everything important in one place all organized into “lockers”. The first locker prompts you to list your family contact information, the second covers important information like property details. You then go on to list financial information in locker three, and finally locker four has space for your professional contacts. If your Executor located your Will, and then saw your Life Locker sitting next to it, they would breath a sigh of relief. In a recent article we talked about the billions of dollars and pounds sitting in bank accounts of deceased individuals, that is never claimed simply because nobody knew it was there. My Life Locker solves this problem.

I recently had to cover a friend’s business interests while he went on vacation in Europe for a couple of weeks and we spent hours going through all of his contacts, procedures for dealing with things and explaining everything that he has to do to keep his business ticking over. It will be a little bit like that for your Executor trying to administer your estate, except they are usually given no information whatsoever. My Life Locker is a great solution for solving an age old problem for the Executor, by simply giving them the information that they need.

Understanding Digital Death: Steps to Protect Yourself Online (Guest Post)

The following is a guest post from Will Eve of finder.com.au

There’s a growing awareness about the downside of living a life so intertwined with computers. First there was the the personal computer, an instrument that made work easier for so many occupations, but we did get up and walk away from it when our work was done. Even if we went back and used it again for recreational purposes most of us recognised the difference between reality and what our computers offered. The advent of the laptop brought us much closer to the digital age. We were now able to take our computers with us when we went outside of the office or home. The smaller note book made it easier again.

Our Physical Lives Are Now a Part of our Digital Lives

More recently we’ve seen a phenomenal increase in the use of the smartphone, which after all is really just a computer that you can hold in the palm of your hand. Then we were introduced to the iPad and tablet. All this development means our lives are becoming more and more involved with the digital world. All you need do is watch a crowd of people walking along a thoroughfare, relaxing in a park or attending a sporting event. A large proportion of them will have a mobile phone up to their ear. People travelling on trains and buses are commonly seen totally engaged with their laptops or smartphones. This has resulted in the following:

  • Online games and social interactions. The completion of a crossword puzzle in the daily newspaper or magazine has been replaced by people interacting with others anywhere in the world by playing scrabble and other like games on their computers. Social media has become the ‘in’ thing in all nations around the globe. Facebook and Twitter have untold millions of subscribers. We now do our banking online, we purchase items online, we sell things online, we get the latest local, national and world news online. In fact anything we don’t know we go online to get the answer. It all results in the fact that our whole live have been taken over and we now have a digital life that runs parallel to our physical lives.
  • What happens when we die? What happens to our digital life? The short answer is, nothing. It continues on as normal. We’re told that Facebook alone contains more than five million accounts belonging to people who have passed on. The mind only boggles at the number of other account throughout the world that remain active despite the persons, whose names they are in, being no longer with us.
  • The digital after life. Some people are referring to our online death after our physical death as being a digital afterlife and something that has to be attended to. Because so much of our private business is carried out online these days we all have to look at putting in place some sort of digital estate plan that will attend to these online accounts on our behalf when we can no longer do so ourselves. Some of the bigger search engines and social media sites are making attempts to help those left behind. Yahoo for instance will terminate an account on receipt of a death certificate. Twitter will archive all the tweets of a deceased account holder and pass them on to an appropriate survivor. However, there is a long way to go before the problem is solved completely.
  • One of the biggest problems is the necessity of having to protect our online IDs with user-names and passwords. Once you die your online ID lives on and will continue to do so if nobody can enter the program to close it down. This means all the family and holiday photos you have stored can no longer be accessed, Your emails accounts will continue. Even your PayPal account where you can have a lot of money stored that should rightfully go to your loved ones will remain on your PayPal account, theoretically forever.
  • You can make it much easier for your agent, or executor of your will, to get things sorted out for your loved ones benefit if you make an inventory of all the programs you have online. If you list every account you have, explain what it’s for and what you want done with it along with the relevant user-name and password, your agent, or executor, will then be able to enter the account and treat it as though it was either his or hers.
  • This brings up another question, that of the security of all this information. You won’t want all your online banking and other sensitive personal details kept where others can get access to it. You could save it all to a disk or flash drive and have it stored with your life insurance and disability policies. You could entrust it to a person whom you trust 100 percent but this would make it hard for you to change the passwords on a regular basis and if you were to die after you had changed the passwords but had not got around to altering the records on the disk or flash drive all your good intentions will have been for nothing.
  • To get over this problem there are a number of sites online that are dedicated to keeping passwords safe. These sites keep all your passwords and other vital information in storage where you can still access them at any time to change the details. Nobody else can gain entry to the site other than through a unique password. In this way all you need do is to have this password kept for your agent or executor and he or she can then go about what they have to do.

 

Where have all the estate planning lawyers gone?

There was an interesting article published last week in Forbes magazine entitled “Where Have All the Estate Planning Lawyers Gone?“. The premise of the article is that with inheritance tax thresholds increasing in most jurisdictions, many people feel that they would be paying for professional advice that would make little financial difference to their situation. In the US, the tax exempt part of an estate has increase almost every year for the last ten years and it now sits at $5 Million. This means that your estate will only be subject to Estate taxes on every dollar above the $5 million threshold which for many people, means that their estate will be passed on tax-free. According to the author, who is both an estate planning lawyer and an accountant

“High-end estate planning reminds me of my favorite nursery tale, Hans Christian Andersen’s The Emperor’s New Clothes: what matters is not whether the client is getting value, but whether he thinks he is getting value. Demand for estate planning has actually been declining for years.  People are reluctant to pay fees for work that does not currently benefit them.  They don’t see estate planning as a productive use of their funds.”

According to the article it seems that many people are questioning the value of professional estate planning advice. In the past the rationale was always that a fee of say, $1000, would easily be recovered by the estate by astute tax avoidance strategies. But with the exemption threshold now being raised to a level that makes it a non-issue for most families, many people are turning to preparing their own estate planning documents.

But it seems that the trend is Worldwide. A new survey coming out of the UK states that “Britons are shunning financial advisers and turning to the internet for advice on estate planning, according to research by Standard Life.” A whopping 48% of people are using the internet to figure out their estate planning needs rather than booking an appointment with a financial planner or solicitor. This is a massive and irreversible trend and the independent survey points out that

“Solicitors are still out in front with 54 per cent of the public turning to them for estate planning but this figure has significantly dropped in the past year, down from 74 per cent the year before.”

We’ve explained the reasons for this many times in our blog; the cost, the convenience, the privacy, the ability to keep documents updated. But it seems that Forbes have hit on an interesting nuance; it’s not just cost, it’s the perceived value for money.

Obviously, there are many situations that call for the advice of a legal professional, but many people are coming to realize that they can produce the exact same documents at a tenth the cost.

Keeping up with the law when writing your Last Will and Testament

One of the common arguments made by lawyers against preparing your own Will is that “the law changes all the time and so your Will may no longer be valid”. I think it’s worth exploring this statement a little bit to see if there is any substance to the claim.

Let us start by discussing what makes a document a legal Will. If you type on a piece of paper “this is my last Will and Testament”, name an Executor, describe how you wish your possessions to be distributed, and then sign and date the document in the presence of two witnesses who also sign, you have a basic, but perfectly legal, Last Will and Testament. This is of course not recommended, because there are other matters to include; for example, alternate plans, plans for minor beneficiaries, guardians for minors, and then of course there are your legal obligations within the Will, for example, providing for a spouse or dependents. Very quickly, you can see why the law has an impact on the creation of a Will, and this is why we provide three very different services; www.legalwills.ca, www.uslegalwills.com and www.legalwills.co.uk for our Canadian, US and UK customers respectively. Each service is shaped by the law for that jurisdiction and within the US and Canada there are variations for each Province and State.

The legal variations from one jurisdiction to another include things like the age at which you can make a Will, the number of witnesses required to sign, and what you can legally do within the Will, for example, disinherit a spouse. In fact, most of the variations in the law affect the help text, rather than the final document itself. So how likely is it for a law to change that would make a Will kit invalid?

Laws do change. One of the most high-profile estate planning changes has been with same-sex marriage; a few years ago in most jurisdictions if a person died without a Will, and they left a same-sex partner, the surviving partner would have no claims on the estate, even if they had co-habited for decades. This is changing and the law is recognising the rights of surviving same-sex partners. However, this change in the law does not actually affect Wills, it has a major impact on people dying without a Will.

The other laws that change are inheritance laws, particularly as it relates to taxation. The US has seen almost annual changes in estate tax law from the 2010 repeal to the 2011 $5 million threshold. But again, these changes do not affect the creation of a Will (although it may cause people to look at different estate planning strategies).

Is it therefore possible, as some estate planning lawyers claim, that you could pick up a do-it-yourself Will kit that would be invalidated because of a change in the law? For the most part, “fill in the blanks” kits are so vague that it would be difficult for them to be invalidated. They are often not much more than a blank sheet of paper, and so it would take a radical law change to make the kit out of date. Of course, any accompanying guide could be outdated, and also, the testator’s plan could be illegal, but the kit itself would probably not have to be pulled from the shelves.

However, once in a while a law is changed that could make kits no longer legal, and this type of law is coming into effect this year in British Columbia. Before this law change, estate planning in the Province was for the most part based on the Wills Act of 1837, and the last major review was in 1920. The change of the law is significant and includes things as simple as changing the term “testator” to “will-maker”, but the more significant change is the philosophy to ensure that a deceased person’s last wishes are to be respected, even if the document containing those wishes does not strictly meet the requirements of a will. This allows the court to correct errors in the formal execution of a will. Furthermore the law is changed to no longer automatically revoke (cancel) a Will when a person gets married. It also allows a person to write a Will at 16 (rather than the current 19). The list goes on, and there are many other interesting changes to the law that need to be considered by will-makers.

Of course, it’s important to note that no law would invalidate all Wills made before the Will came into effect.

We are conducting a through review of our services to ensure that any changes required by this new law are updated for our BC customers. There is a good chance that a kit purchased in a stationery store would not undergo this type of review, but of course, legal professionals working in BC certainly know about the law changes.

In summary to answer the initial question; is it possible for a do-it-yourself kit to be invalidated by a change in the law? possibly. And this is just one more reason why we steer people away from kits like this. Either using the services of a legal professional, or using an interactive service like the one at LegalWills is probably the best way to guard against this.