Comprehensive Analysis of LegalZoom’s Will and Trust Solutions

LegalZoom’s Will and Trust Offerings at a Glance

LegalZoom, the well-known company offering a number of legal do-it-yourself products, also provides some options for creating certain kinds of will and trust documents. LegalZoom offers a couple of different will packages and six different trust packages at various price levels.
LegalZoom’s most basic product comes in the form of the Last Will and Testament. The cost for this is $69 plus $33 for state copy fees to receive a copy of the Will certified by the state, however, delivery of your Will as a state-certified document is the default option (if you do not change this on the payment page) which increases the cost to $138. It is important to remember that while your Last Will and Testament can be very specific as to your wishes, it still is only a document which would need to go through probate upon your death (or guardianship while you are alive but incapacitated) in order for its provisions to be effective. This means that your named executor will still have to go to court, open a matter, and pay court costs and attorney fees in order to pass on your assets to your heirs and beneficiaries. If you need a truly cost effective way to plan your estate, the Last Will and Testament may be the better option, though often times clients find this to be a less than ideal option.
The Last Will and Testament is a good option for those clients who may be concerned that their estate will be hit with a large estate tax burden. The Last Will and Testament is a document that is usually recommended for those whose net worth exceeds the current estate tax limits (currently $5.34 million for 2015), or the value of their estate exceeds $5.34 million, and are worried about how to relieve that tax burden – in these cases, a Revocable Living Trust package is a far better option than a Last Will and Testament. The Last Will and Testament is also a reasonable option for clients who may have simple distribution needs; those who have children and simply want to make sure that a guardian is appointed in the event they pass away; or those who have very few assets that can be passed on to beneficiaries other than joint owners or beneficiaries listed on a beneficiary designation form with the bank or financial institution. However, in short, the Last Will and Testament is not an effective means of avoiding probate.
Another option available to LegalZoom users is the Last Will , Living Will & Power of Attorney combo. This package costs $139, and is often sold as an add-on to the Last Will and Testament. With this package, LegalZoom also asks you to choose between a healthcare or financial power of attorney. While the Living Will and Power of Attorney are only part of a comprehensive estate plan, if you are looking for something simple to start with and are short on time, LegalZoom’s combo package can start you on the right track. Follow up analysis is still required to ensure that this express package will meet all of your needs.
LegalZoom offers a Revocable Living Trust package for $249, a Revocable Living Trust & Pour Over Will package for $309, and an Irrevocable Living Trust estate plan package for $329. The simple standard Revocable Living Trust is recommended for those whose net worth exceeds the current estate tax limits (currently $5.34 million for 2015) or the value of their estate exceeds $5.34 million. The Revocable Living Trust and Pour Over Will combo package is recommended for those who have significant assets but may also have concerns that married couples could be challenged by complex family dynamics, whether this is the couple’s own children or those of a previous marriage. The Living Trust with Pour Over Will package provides additional peace of mind; if your assets are not transferred to your Living Trust prior to your death, property not covered by the Living Trust "pours over" (passes) to the decedent’s estate and passes under the terms of the decedent’s Pour Over Will.
An Irrevocable Living Trust, however, is a more advanced estate planning tool that cannot be undone or changed at a later date. Many people may benefit from the use of an Irrevocable Living Trust, including those who are concerned about protecting assets from probate, taxes, long term care costs, financial predators or spendthrifts. By completing a Revocable Living Trust or Irrevocable Living Trust package with LegalZoom, however, you will be forced to begin transferring ownership of your assets into the Trust upon the drafting of the Trust. There is no alternative to transfer your assets to another party until you are ready to do so. This could cause problems if you do not have family members or others who can help you do this, or if a decision to transfer assets to the Trust becomes more complex once you have your Trust in place.

User-Friendly Factor and Accessibility

LegalZoom has invested effort in order to create a user-friendly interface for creating wills and trusts. The site is simple to navigate and the flow of questions makes sense. Within a few clicks you can find yourself at a comprehensive legal document, complete with instructions on how to execute the documents properly. The wizard-style interface walks you through the process step-by-step. The process will be familiar to anyone familiar with some of the online tax preparation sites. You will be asked for information on different aspects of the will or trust, depending on what you are creating. For example, certain questions are standard and appropriate for either will or estate planning packets, such as names, addresses, phone numbers, etc. Alternatively, if you are creating a trust, there will be questions dealing exclusively with your trusts, such as successor trustees, trustees powers, trust revocation clause, etc. Some of the more basic concepts that may apply to a will or trust are explained throughout the process. There are also some easy-to-follow instructions provided within the packet itself to help the user understand how to execute a will or trust correctly. Many other similar sites do not offer this level of service. LegalZoom has a solid customer support system in place. They offer phone support Mon-Fri from 5am to 7pm PST, depending on your location. There is also live chat support, Mon-Sun 8am to 10pm PST. Further, LegalZoom provides FAQ’s to assist on different cases.

Affordability Assessment: Value for Money?

LegalZoom’s cost estimates are relatively in line with competitor prices for the purchase of a Last Will and Testament or Living Trust, though they are significantly higher than those offered by Dabble. Prices start at around $89 for either estate planning document. A package deal that includes both is available for $179.
These prices are significantly more expensive than Dabble’s $35 for their Do-It-Yourself Last Will and Testament, or $59 for a Complete Estate Planning Package. One potential disadvantage to LegalZoom’s pricing is that they charge extra for any additional services you may need. While costs are fairly standard, you might rack up fees for things that would be considered free services by other companies. For example, both LegalZoom and Dabble offer a "final step" service, which allows the attorneys to send the Will to your Executor following your death. This is free with Dabble’s service, but you must pay $39.99 for LegalZoom’s final step service (which, to LegalZoom’s credit, they do clarify) if you want this. Your Executor will be able to get a self-proving certificate at no extra cost, which will allow them to probate your Will in the vast majority of states. In other words, unless your Executor is located in, say, Texas, where self-proving Wills are not effective, they will not need to hire a lawyer to probate your estate. LegalZoom’s package includes a very basic Executor access arrangement that allows them to get a copy of your Will, but it does not include the filing of the Will or any help in getting your Will through probate. Dabble, on the other hand, provides them with a high resolution image of your Will, which will help them not only file it but also avoid groundless will contests by disgruntled heirs. Executors or successors to Dabble customers can even pay $29.00 for an additional copy of the Will to safeguard against accidental destruction.
LegalZoom customers also pay extra for optional legal documents, such as a Power of Attorney (around $39.95, though it may be cheaper if you bundle it with your cancelled estate planning documents) or a Health Care Directive ($24.95-39.95 for a single form, or $69.95 for two). Dabble customers have access to an online inventory and to discounts on the inheritance planning service generally, which is $89 for a single document, and $149 for bundled documents. Although LegalZoom customers can access an attorney through another service. This costs about $23 for a 20 minute consultation with a licensed attorney, and is presumably similar to the video attorney consultations offered by competitor sites, though LegalZoom calls them "legal plans." You can also get help from your individual writer through the "Ask a Lawyer" feature from LegalZoom at any time (unlike a legal clinic, which is only open at certain times), but there is no guarantee that the response will be accurate.

Legal Considerations and Privacy

LegalZoom’s service for creating a will or a trust is offered through its LegalZoom Terms & Conditions as a Legal Document, as is the case with all of LegalZoom’s products, or its Core Services Agreement with VIP Service, which includes consultations with attorneys. While this means that LegalZoom will have no liability for your state’s particular laws on wills and trusts or any other probate issues (as essentially all companies offering legal forms disclaim liability for the contents and form of their documents), this doesn’t mean that LegalZoom’s estate planning products are not compliant with state laws.
When you understand that LegalZoom does not draft your will or trust but simply provides guidance through an interactive process to organize the information you need, you can clearly see that LegalZoom remains in compliance with state laws. You still must provide legally required information: state of residency, date, county of residency, and for wills, your executor and the executors’ age, and for trusts, the assets intended for your trust and any specific gifts you want to include. You must also execute the document in the manner required by state law.
Like most wills and trusts created online, however, state law addresses the execution process but not the mechanism by which the will or trust was created, provided that the will is executed in writing. So, even if the will is typed rather than handwritten, if it is witnessed and signed according to the law of the state, then the will is valid. This is true even if the will was not created in the traditional way, with an attorney drafting the document and multiple witnesses.
LegalZoom offers some guidance on security on its website. LegalZoom indicates that it contracts with third-party Secure Socket Layer (SSL) technology and complies with industry standards such as PCI-DSS, which is a set of security standards for companies that handle credit card information. And according to LegalZoom, when you create an account with LegalZoom and transmit your credit card information over the Internet, that information is protected by SSL encryption. LegalZoom itself also has encryption on its site to prevent hackers from stealing information during transmission and captures the personal information of paying customers in an encrypted format.
LegalZoom uses "multiple layers of security," including firewalls, intrusion detection, and an internal security team. LegalZoom does outsource some of its document storage to guide the development of its third-party storage system, although it does not reflect this detail on its site. It is unclear, however, whether LegalZoom encrypts the contents of documents that are stored on LegalZoom’s servers. It does suggest that LegalZoom employees are able to access the stored information, though not your credit card information or account password.
Finally, LegalZoom also points out that it has never been hacked through the use of SSL secure servers.

Consumer Feedback and Satisfaction

Customer reviews and satisfaction are key indicators of the quality of LegalZoom’s will and trust services, and they paint a largely positive picture overall. Positive reviews frequently highlight the convenience of having a quick and easy option to prepare important estate planning documents and the peace of mind that comes with having one’s wishes documented. Many customers mention the pleasant experience with the customer service staff and how the representatives are readily available to answer questions about forms, the ability to add a power of attorney or healthcare power of attorney to the "Legal Vault" where customer’s documents are stored for free , and the ease with which the process can be completed online. Negative reviews largely center on the concern over one of the party’s inability to be able to add a signature or make changes to the document online or the concern that forms may be too generic to be fully utilized.
Online reviews of the company as a whole rate LegalZoom’s will and trust services at around 3.5/5 stars overall. Based on the content of these reviews, customer satisfaction is skewed positively with approximately 80% of reviews being extremely or very satisfied, and 20% being somewhat or not at all satisfied. Legal documents in general typically receive a lot of complaints on software review sites, primarily for how generic the documents are in terms of a particular state’s laws. Despite this disappointment with the content of the forms, it appears that LegalZoom has an established reputation for quality service and customer support.

Strengths and Weaknesses: A Balanced Outlook

LegalZoom has undoubtedly set the benchmark for appearance and convenience in the estate planning arena, and the company’s offers an expansive menu from which to choose. Yet not all people seeking Wills or Trusts should use the services of the LegalZoom. Here are some pros and cons to help you make your decision – one that shouldn’t be taken lightly:
Pros
Convenience: Completing the questionnaire at your own pace and at your convenience is a major benefit. The package arrives in the mail a few days later, completed, signed and ready to go.
Ease of Use: The questionnaire breaks down complex ideas into questions easily understood by the average reader.
Consistency: The packages contain the same verbiage regardless of who is making the request.
Cons
Legal Advice: No legal advice is offered. It is up to the user to determine if he or she needs a more complex plan or requires special provisions to cover unique circumstances such as a disabled beneficiary or an unusual request.
One-Size-Fits-All: There is a very limited number of choices and geographical jurisdictions, which might not fully meet your needs.
Software Error: Any software program can have technological glitches that take time to resolve. It’s important to make sure that your trust has all of the correct names and dates, and to do so using the appropriate jurisdiction platform.
The choice is yours: Don’t underestimate the complexity that may be present in your estate and consider all your options before buying any Will or Trust.

Conclusion: Is LegalZoom the Right Choice for You?

In drawing the curtains on our comprehensive review of the LegalZoom estate planning model, I have admittedly mixed feelings. On the one hand, I believe wholeheartedly in the value and utility offered by LegalZoom and its competitor sites in the area of simple wills and trusts. To anyone who could never afford to pay $2000+ for a lawyer to draft a basic estate planning document, LegalZoom is a huge advantage.
But for everyone else, a will or incorporation for $69 does not seem to provide a high level of service or protection if something goes wrong. The LegalZoom terms of use seem to limit their responsibility for errors that render the documents invalid or require (and/or compel) additional fees to fix the errors.
Still, this unique business model has enabled those of us in the legal industry to face a very real challenge: low-cost, quick and easy online services that demystify the process of law—and undercut hourly billing rates.
Although LegalZoom’s pricing structure shows some deceptiveness, I believe the overall product and service is still a good option in select scenarios.
For those who are probably going to end up working with their state’s forms or some other form available online or at a local office supply store , LegalZoom can be a very efficient option.
However, my gut agrees with David Lat of Above the Law – these operating systems are designed for volunteers at the local hospital or community center. It’s important to question the ethics of these flagship "community programs" LegalZoom claims to sponsor.
Conversely, situations in which LegalZoom or one of its competitors could be the best alternative are as follows:
Conditions that favor LegalZoom:
Conditions that favor lawyers:
There you have it. The bottom line is that the customer ought to have a choice—a choice between a $69 will or incorporating your business for $139 and a licensed attorney, and those options may suit different people differently. I’m not prepared to say that LegalZoom is better than the other options for everyone, but I do recognize that LegalZoom offers a complete and comprehensible product for people who would otherwise remain in the dark, likely ending up with a will that was put together out of desperation and without much understanding about what the document was, why they needed it and how to administer and execute it.