The problem with traditional estate planning

The problem with traditional estate planning is it doesn’t work for most people. I know that because 58% of American adults don’t have a will. That number is even higher when you limit it to those with young children.

Why don’t more people have an estate plan? After all, most people seem to know it’s important. The answer most estate planning attorneys give is “people just don’t want to think about death.” Hogwash.

True, estate planning involves thinking about death and other unpleasant things. But so does life insurance, and health insurance, and plenty of other things we do to provide for our families and keep them safe. We don’t shy from facing harsh realities when it means protecting our loved ones.

No, the reason more people don’t have an estate plan is not some willful delusion about death. It’s lawyers.

Blame the lawyers

If you look at a recent survey, the leading explanation for not having an estate plan is “I just haven’t gotten around to it” (47%).

Why do you think so many people haven’t gotten around to it? It’s because you have to go to a lawyer to get a will. And lawyers aren’t known for making things easy. Or cheap.

I’ve done traditional estate planning. Here’s what it looks like:

Meet in the lawyer’s office for an hour or two for a consultation. Meet in the lawyer’s office for an hour or two to make all your big estate planning decisions. Meet in the lawyer’s office for an hour or two to review and edit documents. Meet in the lawyer’s office for an hour or two to execute your final documents.

This process requires you (and maybe your spouse) to take time off work for each meeting. It involves the lawyer doing all the work. And it’s expensive because you’re paying a highly trained expert to do all this work one-on-one. For some people this process works. But for most people it’s impractical and unneeded. There must be a better way.

The DIY option

If traditional estate planning is too expensive and inconvenient for you, there is another option. You can do it yourself. Cutting the lawyer out of the equation certainly makes it cheaper.

Ron Swanson's will
Ron Swanson was the DIY type.

It used to be that DIY meant buying a book or a form. Now it usually means something like LegalZoom. However it looks, though, it essentially comes down to filling in the blanks on a boilerplate document. Because these document templates are meant to be used by anyone and without a lawyer, they are made to address only the most common situations. In other words, they are bare bones. They make cookie cutter estate plans. They get the most basic job done, and that’s about it.

Even if you only want a very basic estate plan, DIY planning still poses a big risk. Without a professional looking at your particular situation, you’ll never know if you’ve missed something important. You don’t know the law and you can’t anticipate how it will affect you specifically. That’s why most people feel hesitant to do their own estate planning—and rightly so, I think.

When you have a lawyer, you can personalize your documents without fear. Your lawyer ensures any changes make sense and work with the law. And your lawyer will know what you can and should change to achieve your goals.

Without a lawyer there’s no one to catch all the issues and risks you don’t see yourself. Without a lawyer there’s no one to tell you what you can do with your legal documents, never mind what you should do. Doing your own estate planning is certainly cheap, but it also severely limits what you can do. And you’ll never be confident you haven’t missed something important.

Another way

As you can see, I think both traditional options for getting your estate planning done are poor options for most people. To get a good estate plan, you need help from a lawyer; but lawyers have not made the estate planning process easy, pleasant, or affordable. That’s the real reason why most people haven’t gotten around to it.

I think the solution is to combine the best of both traditional estate planning (solid legal advice) and DIY planning (affordability and a sense of empowerment) by applying the Pareto principle. The Pareto principle is commonly called the 80/20 rule because it estimates that 80% of the results comes from 20% of the effort. I think you only need a lawyer for 20% of the work put into estate planning, and the remaining 80% you can do yourself with just that bit of help from the professional.

Things you can do yourself:

  • Gather information
  • Learn about estate planning
  • Think about and make informed decisions
  • Decide what’s important to you and identify your goals
  • Use an online app to create most of your estate plan
  • Execute your estate planning documents

Things you need a lawyer to do:

  • Identify your particular legal issues
  • Teach you what you need to know to make informed decisions about your estate plan
  • Answer your legal questions and help you make tough decisions
  • Check your decisions and documents to make sure they address every issue and achieve your goals
  • Customize your documents to meet your needs

The things that take the most time in estate planning are gathering information and learning what you need to know to make good, informed decisions. In traditional estate planning, the lawyer just explains things to you in meetings. But there’s no reason you can’t learn in other, more efficient ways, such as by reading a guide or watching videos. That cuts out a lot of lawyer time and brings down the cost significantly.

This isn’t just about cost, though. You do more of the work, and you learn by doing. This will mean you learn more than you would just listening to a lawyer talk. More importantly, you’ll be empowered by the knowledge of how to do estate planning.

I’m just starting to figure out how this third way of estate planning might work. I’m putting together a pilot program to try it. I’m calling it Forward Estate Planning, and you can learn more about it here. This is very much a work in progress. You can follow along and watch it evolve if you sign up for my newsletter: