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.

 

Advertisements

The cost of a Will – enter Walmart

In previous articles we have discussed the cost of a Will. How is it that we charge $34.95 or £24.95 when the exact same document created by a lawyer will cost anything up to $800 or £500? There are a variety of reasons for this; our costs are kept down because you are effectively writing the Will yourself, and the $800? well, that’s simply overcharging.Wal-mart

The line that is drawn between an online service like ours and going to a lawyer has now been blurred a little by two Canadian lawyers who have set up booths in Walmart. They are using software to create $99 Wills and they are trying to remove the intimidation factor out of Will writing by allowing you to simply walk in without an appointment and have your Will written for you. It’s a interesting approach because that’s exactly the same process by which the $800 Will is created; you provide some personal details and key decisions and the lawyer enters your details into some software and the Will is generated. In fact, this cut price approach is absolutely no different to any other lawyer, and the end result is no different to a Will written by any other lawyer, or a Will written using the service at LegalWills.ca. So why are they only charging $99? The Walmart lawyer explains

We don’t fault other lawyers. If we were doing two a week, we’d have to charge more

so let us understand this….the premium that somebody would pay to use a lawyer has no relationship with the quality of the end product, it’s simply because the lawyer has to charge more to sustain their business.

So what do other lawyers make of this; a well known legal blog said

While a Wal-Mart will may sound like a “good deal”, one-stop estate planning at Wal-Mart may prove to be problematic, should these wills be challenged at some point in the future. Only time will tell.

may prove problematic? what does that mean? These Wills are written by a law firm, why would they be problematic? My guess is that it would be absolutely no more problematic than any other Will that has been written either using a lawyer or a service like the one at LegalWills.ca. It sounds to me like some vague scaremongering.

There are however, a few inherent problems with a “walk-in” Will writing service. Most people do not know all of the answers to all of the questions without a little consideration. For example, naming an alternate Executor, bequests to charities, guardians for children. Some of these things take some real thought and are not answers that you would like to give on the fly.

The final question remains; is $99 a fair price? Well you could pay $99 and save hundreds of dollars, or you could just put your details into the software yourself and save yourself even more. LegalWills.ca allows you to do exactly that for $34.95, from the comfort of your own home. You can take as long as you like to get things precisely the way you want them to, and most importantly you can make updates whenever the need arises, by simply logging into your account, making the change and printing off a new Will. USLegalWills.com offers the same for $34.95 and LegalWills.co.uk is available for UK customers at £24.95.

The options are quite clear. The final document is exactly the same but you can pay a lawyer $600 to enter your information into the Will making software (they have an office to maintain), you can pay Walmart $99 to enter your information into the Will making software (they do thousands, so they can afford to be cheaper), or you can do it yourself for $34.95.

The scourge of the online Will kit

Here’s the problem; everybody needs a Will, but lawyers are too expensive and inconvenient. As a result 65 percent of people don’t have a Will. To address this issue, countless “downloadable Will forms” proliferate across the internet. People use these forms and their loved ones end up with a mountain of trouble.

Let’s explore the evidence;

Are lawyers really too expensive or inconvenient? According to the customers who come to LegalWills, yes, absolutely. They are being quoted anything up to $1200 or £800 for a simple Last Will and Testament, but more commonly it is in the region of $600 or £400. The more significant problem is that updates are being charged anything up to $100 or £50 per change. There is also a gap between what lawyers think people can pay, and what people are prepared to pay. I read this recently on a legal blog, written by an estate planning lawyer

At least once a week I get a call from a potential client. The question is always the same: “How much does X document cost?” This is always a perplexing question. Usually the answer is “I don’t know.”

I know of an attorney who agrees to quote the client a price over the phone if they can answer one simple question: “What color tie am I wearing today?” …This lawyer knows that people will protest- “how can I know what color tie you are wearing if I am not there?” The lawyer then points out (if the client has not gotten it already) that both questions are similar.

So here’s the disconnect; the lawyer thinks he is clever and the client is a bit dim. The prospective client on the other hand wants to know whether they should include in their household budget some money to prepare a Last Will and Testament. In order to do this, they need to get a feel for how much it will cost. I cannot think of any other situation where you would blindly procure a service, hand over your wallet and ask the service provider to charge you whatever they want (veterinarians and dentists aside!).

So most people end up without a Last Will and Testament in place, and of those that do, most are not kept up to date. So we find service providers offering a “downloadable Will” sometimes free of charge. I saw a new one just last week – I have embedded a screenshot of the body of it here. Last Will and TestamentThey have tried to convey some authenticity with some calligraphy at the top and an impenetrable legal sentence to kick off the document

 

I JOHN DOE KNOW ALL PERSONS BY THESE PRESENTS:

 

But the meat of the document comes in article IV, where you are given space to explain how you would like your estate to be distributed. Personally, I feel that this document should be illegal; it is preying on people who don’t want to pay for legal advice and who are trusting this company to provide them with a legally binding document. But it is nothing short of impossible to complete a satisfactory Will using a blank page like this. You need to create alternate plans, trusts, Executor powers, residual plans and without these you end up with an estate like Ann Aldrich who used E-Z Legal Forms to prepare her Will. She listed out her possessions and instructed all of these things to go to her beneficiary. Unfortunately she didn’t explain what should happen to everything else. The result was a family battle over her estate and a judgement that included this warning “I therefore take this opportunity to highlight a cautionary tale of the potential dangers of utilizing pre-printed forms”

Fortunately, there is a very large middle ground between expensive lawyers and dangerous blank forms, and this is being filled by interactive services like the ones at LegalWills.ca, LegalWills.co.uk and USLegalWills.com. These services guide you through the process with a series of questions, and then verifies that you have covered all scenarios. It only allows you to do things that your jurisdiction permits, and double checks for things like minor children having guardians and trusts set up appropriately. Clearly some people still need expensive legal advice and custom clauses to be written, but services like this work for the vast majority. So much so, that when a recent study from Oxford University listed the most likely jobs to be replaced by technology, paralegals were 4th on the list with a 94% probability of being replaced by software. Most people who have a Will written by a legal professional have their information typed into software and their Will generated from templates (the staff in the office usually do it), but online services like LegalWills are granting access to those tools directly to the consumer.

People are not likely to use a lawyer who refuses to tell them how much they will charge. But we are hoping that we can steer people away from blank form kits.

 

You may not need legal advice to write a Will

I received an interesting comment from somebody recently;

“I learned of a woman who did a Will through this process but was not advised about how to care for her disabled child when she passed. No Hensen trust was set up for the child. In my personal and professional experience, a person should receive legal advice when preparing a Will”

This comment actually makes no sense. We would agree that this particular person should have received legal advice in preparing their Will. In fact, one of the questions we ask up-front is whether there are special needs children to care for within the Will. If there are, then we would explain to that individual that our service is not a good fit for them, and that they should indeed seek legal advice. But does that therefore mean that everybody needs legal advice to write a Will? Of course not. The vast majority of the users of our service need a Will that leaves everything to their spouse, and if something were to happen to both parents, then the estate would be distributed between their children. Guardians should be named, and possibly trusts for minor beneficiaries. But a Will covering this situation is straightforward and can be written using our service in about 20 minutes. In fact, if you went to a legal professional to prepare this type of Will, you would be paying way more than you need to.

Of course there are are complicated family situations that would benefit from legal advice, but scaremongering everybody into paying for a lawyer leaves us with a situation where about 70% of adults do not have an up-to-date Will. The vast majority of those people could quite easily use our service to fit their estate planning needs.

But the counter argument would be “ahhh, but how does a person know if they need legal advice or not?” At LegalWills.ca, LegalWills.co.uk and USLegalWills.com we provide a list of circumstances under which we recommend that a person seek legal advice and not use our service. These include; planning to disinherit a spouse, a history of mental illness, children with special needs or if you think that there may be a challenge to the Will, or have any doubts whatsoever about your situation.

Our advice would be that although you may have heard of somebody needing legal advice to prepare their Will, you shouldn’t feel that this situation applies to you. And you shouldn’t let the thought of booking an appointment with a lawyer put you off preparing your Will. You can have a Will in your hands in about 20 minutes at LegalWills.ca, LegalWills.co.uk and USLegalWills.com

The funnel to a successful estate plan

It’s an unfortunate reality that very few people end up with a perfectly executed estate plan. In an ideal world we would see every person’s assets being passed to the next generation in a way that represents their wishes, in reality there are a number of key steps to this process and consequently too many points of failure. This post will explore those steps and what we are doing at LegalWills to try and improve the numbers;

1. 65% of people don’t write their Will

This is of course the most significant leak in the funnel. The vast majority of people never create a Will because it is too expensive or inconvenient. As a result, people procrastinate thinking that they can get to it some time next year. Alternatively they wait until there is stability in their life because they think that the writing of a Will is something that they only want to do once in their life. We often hear from people who say “I will be getting married next Summer, should I hold off writing a Will until then?”. On the one hand, it is true that getting married will invalidate the Will in most jurisdictions, but there is never a time that a person should be without a Will. So we recommend that the Will is written today, updated when the person gets married, and updated every time they experience another major life event. Which brings us to the second issue – Funnel

2. Most Wills are not kept up to date

When a person visits a lawyer to prepare their Will, they can pay a significant amount of money and with that, they would expect the document to last quite some time, if not a lifetime. The reality of course is that the document can be out of date by the time the person gets home. There are many high profile examples of Wills not being updated with dire consequences; new children not being included, new partners, Executors who are no longer fit to serve. In fact, most celebrity Will disputes are caused by a Will not being updated to reflect new circumstances. A Will should not only be updated when there are changes in personal circumstances, but also when a life event happens to anybody named in the Will. It may be that the personal guardians for your children have moved across the country, had triplets of their own or for whatever reason are simply no longer the best choice. Many times we hear from people who explain that “I do have a Will but it was written twenty years ago, before we had children”, in which case, although they are one of the 35% with a Will, it is all but useless.

3. Many Wills are never found

The single most common question we receive at LegalWills for non-customers is “my father had a Will, but we don’t know where it is, how can we find it?” and the short answer is, you can’t. It doesn’t matter whether the Will is stored at home, or with a lawyer’s office, if the family and loved ones are not told where the Will is located, they have very little chance of finding it. We also hear from customers who aren’t sure how to revoke an old Will and explain that “I had a Will written 15 years ago with a lawyer, but I was living in a different city then, I’m not even sure that the lawyer is still there, how do I cancel this Will”. In this situation the testator can’t even find their Will, so there is no chance of a family being able to find it. So although this person is technically one of the 35% with a Will, it hasn’t been updated and it has no chance of being found.

4. The Executor has no idea how many assets there are

We are now left with less than 10% of the population; they have written their Will, they updated it regularly to reflect changes in their circumstances, their family and loved ones are able to find the Will when they need it, but now the Executor will have to find the assets. But there is no list of assets kept with the Will; so infrequently used bank accounts, online assets, dormant savings accounts, stock purchases, or even cash under the floorboards will never be found and never make their way to the beneficiaries. It is never a good idea to include a complete list of assets in the Will itself; they change frequently and you wouldn’t want to have to update the document every time a new account is opened, but the Executor needs to know when their job is complete.

At LegalWills.ca, LegalWills.co.uk and USLegalWills.com we have tried to solve these issues. Firstly, we created a service that allows you to write your legal Will for $34.95 or £24.95 from the comfort of your home. We then allow you to update the document by simply logging into your account, making the change, and printing a new document. We then allow you to create messages that can be distributed to key people after you have passed away, and this can include instructions for locating your Will. Finally we have teamed up with My Life Locker™; the Ultimate Life Organizational System. Using this service you are able to maintain a file of your personal assets which can then be accessed by designated keyholders™ only at the appropriate time. This ensures that all of your assets make their way to your beneficiaries.

The challenge of keeping your Will up-to-date

Most professional advisors recommend that you update your Will after key life events. Certainly marriage, divorce, the birth of new children, or the death of a beneficiary would all necessitate a review of your Will. Sadly though, these life events are generally so significant that the updating of your Will is probably the furthest thing from your mind.

We saw the example just over a year ago of Gary Coleman who prepared a Will in 2005 and then over the course of a couple of years married, divorced and then lived as common-law. He attempted to keep his Will up-to-date by adding handwritten notes to it, which resulted in a long, protracted legal battle over his estate. Then there was the case of Anna Nicole-Smith’s Will, which was not updated after the birth of her child. She died when her child was 5 months old, and quite understandably had not found the time to update her Will (in spite of being surrounded by lawyers in her life).

If you think about what really happens during the traumatic life events, like the death of a child or a divorce – how soon can people realistically be expected to book an appointment with a lawyer to re-write their Will? And when many life events occur in quick succession, how significant is the $600-$800 cost for every update?Blue-Eyes-Cute-Baby-HD-Wallpaper-1080x607

The life event that hits closest to home for me is the birth of a new child. It was four weeks after the birth of our daughter that we sat down and said “oh, I guess we’ll need to update our Wills, after all, we needed to name a guardian for the child, and set up a minor trust.” It took us a full four weeks to realise that this needed to be done – and I work full time for the LegalWills websites !!

Of course, one strategy employed by the legal profession is to try to future-proof the Will. Clauses refer to “any surviving children”, or “any known issue” which takes into account the births or deaths of any children between the writing of the Will and the execution of the Will. However, it’s a bit of a workaround, because new children need to have guardians appointed in a Will, and they should have trusts set up for their inheritance.

Fortunately for me, my Will was written using LegalWills.ca, and our other services at LegalWills.co.uk and USLegalWills.com provide the same convenience. I don’t need to pay anything for an update – I simply login to my account, add the new child, name a guardian and then determine the ages at which my daughter will receive her inheritance; even splitting it one third at 21, one third at 25 and one third at 30. It took me about 10 minutes and it was all completed while sitting on my sofa at home – now I just need to print and sign the new Will in the presence of two witnesses to have a legal up-to-date Will.

Like most people, I would not have taken the time to seek out a lawyer and I wouldn’t be prepared to pay $800 to make these changes. Fortunately, by using the LegalWills service I know have the peace of mind that my new daughter is taken care of should anything happen to her parents.

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.