The Problems With “Do-It-Yourself” Legal Work: Why You Should Think Twice Before Going it Alone

Martinson & Beason

In today’s world, almost everything is available at our fingertips with only a few clicks. You probably have seen advertisements for do-it-yourself legal help while watching television or surfing the web. These services are promoted as simple and convenient, leading people to believe that preparing a legal document is as easy as filling in blanks on standardized forms. Unfortunately, we regularly encounter DIY-gone-wrong every day.

DIY legal software programs and websites tend to provide a cookie-cutter, one-size fits all approach to preparing a legal document. This is troublesome because the law is not the same from state-to-state. Each state has their own unique laws, and such laws often times vary state-to-state. Even if the software is tailored to Alabama law, problems still arise as clauses or provisions are inadvertently added leading to unintended consequences.

Do It Yourself Legal Work and Estate Planning

For most people, the primary purpose of an estate plan is the preservation of assets and an orderly distribution upon death. While a trusted local estate planning lawyer can help create a careful and tailored approach, you run the risk of a compromised plan in the event the will is not correct under your circumstances.

For instance, under Alabama law, there are certain legal requirements and formalities that are necessary in order for your will to be considered valid. The legal requirements include age, testamentary capacity, and testamentary intent. Testamentary capacity requires you to know generally what you own, how you want your property distributed, and the natural objects of your bounty (your family). Further, under Alabama law, a will must be in writing, signed by you, and be witnessed by two people. If any of these legal requirements and formalities are not met, your will is considered invalid. In order for a will to be valid and self-proving, it must also be notarized. This is an important step that eliminates headaches in the probate process.

In other instances, a will is properly executed but leaves a glaring omission that an estate planning attorney would catch. For instance, an adult child who receives supplemental security income may risk losing this and other public benefits if he or she were to receive a large inheritance. However, a carefully drafted special needs trust can preserve assets and keep public benefits for the adult special needs child.

Many DIY legal software programs fail to adequately take into account state differences. The consequences of not doing so can be grave. For example, if your will is invalid your estate is passed as if you never prepared a will. In such a case, your will passes according to the Alabama intestacy statute.

Do It Yourself Legal Work and Business Organization

Many entrepreneurial small business owners are lured into DIY incorporation or LLC formation on the rationale that they can reduce costs. Our firm regularly encounters small business disputes where an operating agreement, which governs the business’s operations, leads to totally unanticipated consequences. Many operating agreements include arbitration agreements, forum selection clauses, and other important provisions that are not fully understood or intended. Where an operating agreement causes unintended consequences, litigation often follows. In the world of business law, it’s cheaper to build companies up than tear them down. By spending the time and money to get the job done right the first time, many small businesses are able to avoid more costly conflict down the road.

Small business and non-profit incorporators may also have to provide their operating agreements and other legal documents to the IRS depending upon their tax elections. A non-profit corporation is required to have certain provisions in the operating agreement for tax-exempt status. A corporate attorney can ensure these provisions make it into your important documents.

Although many businesses and business transactions seem routine, every deal is unique, providing its own set of issues and challenges. DYI legal software programs and websites provide general business organization documents. The documents are not tailored to your business’s specific needs.

Ultimately, the benefit of hiring an attorney to prepare your legal document(s) is to ensure that your needs have been tailored to in a way that only an attorney can tailor to them. In addition, by hiring an attorney, you buy peace of mind, because your attorney will make certain that your legal document is in accordance with your state’s law (and there is no risk that the document will be invalid).

DIY legal preparation websites can be a cost-effective way to have your legal documents prepared.  Just keep in mind these sites often do not consider any special circumstances you may have.  Moreover, they normally don’t offer any legal advice as to what your ongoing legal obligations may be.  For example, most states have corporate laws that have annual meeting and minutes requirements.  In summary, DIY could be a good fit for your legal need; however, as the saying goes, don’t be penny wise and pound foolish.