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The Perils of DIY Estate Planning - LegalZoom Sued

A class action lawsuit initiated in California accuses the online document preparer LegalZoom of unfair and deceptive business practices.  The lead plaintiff, Katherine Webster, is the executor of an estate and the trustee of a living trust created by the decedent.  She claims that the estate had to hire an attorney to resolve problems with the LegalZoom-created documents.  

 

The suit alleges that:

 

•    LegalZoom claims to “customize” its documents, but the customization is limited to customers’ names and identifying personal information;

 

•    LegalZoom’s website and advertising give consumers a false sense of security by claiming that “virtually anyone” can create a valid legal document through the site, and that the “customized” documents made by non-lawyers would be reviewed for “accuracy and reliability”;

 

•    Nearly all of LegalZoom’s claims are contradicted by disclaimers that are accessible only by following links to secondary pages of the website, and in much smaller type than that displayed on the website’s main pages.

 

Ms. Webster is seeking disgorgement and punitive damages for negligence, elder financial abuse, consumer law violations and illegal and unfair business practices.  She is represented by Kathryn Stebner with Stebner and Associates of San Francisco.

 

Anyone who chooses to have an estate plan prepared for them should be encouraged to do so particularly because the motivation to prepare a trust is typically to help ensure that one’s family is cared for and frees them from incurring the time and financial expenses of probate upon one’s death.  However it is very important to note that Do-It-Yourself (DIY) estate planning is dangerous and can create more problems for your loved ones than it solves.  Also, when taking into account all of the “optional services” offered through the online companies, the price difference is between an online estate plan and one prepared by an attorney is not substantial.  

 

Because of our desire to provide each client with an estate plan specifically designed to fit their unique needs, we do not charge a standard fee for these services.  Instead, after a complimentary consultation during which we discuss your present and anticipated situation, your desired distribution provisions, and your objectives, we will provide you with a quote for the preparation of your estate plan.  We do not believe that estate planning should be held up due to financial issues.  Therefore, we offer a variety of payment plans for your convenience.

 

Additional references:

 

Class Claims LegalZoom is Unfair and Misleading - Courthouse News Service, 6/1/10

Suit Claims LegalZoom’s Document Prep is Unauthorized Practice - ABA Journal, 2/19/10