The Top Five Mistakes People Make When Using Online Estate Planning Tools
In an era where you can order groceries, file taxes, and even renew your passport online, it’s no surprise that estate planning has gone digital. Platforms like LegalZoom, Trust & Will, and Rocket Lawyer promise to help you create wills, trusts, and powers of attorney in under an hour—often for less than the cost of a single lawyer consultation.
But convenience comes with caveats. While these tools can be a godsend for straightforward situations, they’re not foolproof. Here are the five biggest mistakes people make when using online estate planning services—and how to avoid them.
Mistake #1: Treating DIY Tools Like a Full Legal Consultation
The Trap: You breeze through a questionnaire, hit “generate,” and assume your documents are bulletproof.
Why It’s Dangerous: Online platforms use standardized templates. They can’t account for nuances like blended families, special needs beneficiaries, or state-specific quirks (e.g., community property laws in Arizona vs. Texas).
Real-World Example: A California user created a will via an online tool naming her spouse as sole beneficiary. She forgot to update it after a divorce—and California’s revocation by dissolution law didn’t apply because the platform didn’t flag the issue. Her ex inherited everything.
Fix: Treat the tool as a starting point. Schedule a 30-minute review with an estate attorney (many offer flat-fee consultations for $200–$400).
Mistake #2: Forgetting to Fund Your Trust
The Trap: You create a revocable living trust online to avoid probate… then never transfer assets into it.
Why It’s a Problem: An unfunded trust is just a stack of paper. Real estate, bank accounts, and investments still go through probate if they’re not retitled in the trust’s name.
Stats to Know:
60% of trusts created online are never funded (per a 2023 WealthCounsel survey).
Probate in Los Angeles County can take 12–18 months and cost 4–7% of the estate’s value.
Fix: After creating the trust, immediately:
Deed real estate to “John Doe, Trustee of the John Doe Revocable Trust dated XX/XX/XXXX.”
Update bank/investment account titling.
Assign life insurance or retirement accounts to the trust (or name it as beneficiary).
Mistake #3: Using Generic Guardianship Clauses for Minor Children
The Trap: You name a guardian for your kids with a one-sentence clause like, “If we die, Aunt Jane gets the kids.”
Why It’s Risky:
What if Aunt Jane moves to Sweden?
What if she’s in debt and creditors target inheritance funds?
What if your kids hate her by age 12?
Better Approach:
Name alternate guardians (primary, secondary, tertiary).
Include a trust for minors (e.g., distributions at 25/30/35 instead of a lump sum at 18).
Add a “no-bond required” clause to avoid court delays.
Mistake #4: Ignoring Digital Assets and Online Accounts
The Trap: Your will covers the house and 401(k), but forgets your crypto wallet, Etsy shop, or 50,000 airline miles.
Why It Matters:
Fiduciary Access Laws Vary: Only 40+ states have adopted the Revised Uniform Fiduciary Access to Digital Assets Act.
Platforms like Coinbase or Robinhood may freeze accounts without proper authorization.
Fix:
Create a digital asset inventory (spreadsheet with logins, 2FA recovery codes, etc.).
Store it in a password manager (LastPass, 1Password) and grant your executor access.
Include a clause like:
“My fiduciary shall have authority to access, manage, and distribute my digital assets under applicable law.”
Mistake #5: Never Updating After Life Changes
The Trap: You draft a will at 30 when single, then forget it after marriage, kids, or a cross-country move.
Common Triggers to Review:
Life Event Why It Matters
Marriage/Divorce Spousal rights override old wills
New child Automatic inheritance laws may conflict
Moving states Wills valid in NY may fail in Louisiana
Inheritance >$100k Tax implications (e.g., step-up basis)
Fix: Set a calendar reminder every 3 years or after major events. Most online platforms let you revise for free or a small fee.
Final Thoughts: Use Tools Wisely, Not Blindly
Online estate planning tools are like IKEA furniture—great for basics, but you wouldn’t trust them for a load-bearing wall.
Quick Checklist Before You Click “Finalize”:
Reviewed by an attorney?
Trust funded?
Guardians + alternates named?
Digital assets included?
Signed, notarized, and stored safely?
Your family’s future deserves more than a Terms of Service agreement. Use the tools, but don’t let them use you.
Have you made any of these mistakes? Share in the comments—I read every one.
