LegalZoom’s “$50,000 Peace of Mind Guarantee” — the false allure of the DIY legal service

In my prior post, I talked about some dangers in using DIY estate planning services such as LegalZoom. One of those dangers is the fact that, if you use an insured estate planning attorney and he screws up, your survivors are protected by his malpractice insurance. Services such as LegalZoom, though, are not your attorney and therefore cannot commit malpractice.

LegalZoom happily tells you, in its disclaimer:

LegalZoom is not a law firm, and the employees of LegalZoom are not acting as your attorney. LegalZoom’s legal document service is not a substitute for the advice of an attorney. LegalZoom cannot provide legal advice and can only provide self-help services at your specific direction. LegalZoom is not permitted to engage in the practice of law. LegalZoom is prohibited from providing any kind of advice, explanation, opinion, or recommendation to a consumer about possible legal rights, remedies, defenses, options, selection of forms or strategies.

Yes, LegalZoom is legally prohibited from providing any kind of advice to you, dear consumer.

Apparently to combat this problem, LegalZoom has a “$50,000 Peace of Mind Guarantee.” I’ve reviewed the conditions of this guarantee and it frankly doesn’t give me any peace of mind.

The guarantee states, “If your Living Trust is found by a court of competent jurisdiction within the United States to be invalid solely because it was created online through an internet website, we will pay you $50,000.” In my experience, I do not anticipate a court in Idaho invalidating a living trust “solely” because it was created online. In other words, my prediction is that LegalZoom will never have to pay out on this guarantee in Idaho.

The guarantee goes on to list a bunch of circumstances in which LegalZoom will not pay the $50,000, including any failure to properly “execute” the documents, properly fund the living trust, or having your documents properly witnessed and notarized — all reasons that commonly lead to online DIY estate planning documents being declared invalid. LegalZoom also will not pay you anything if a court decides your LegalZoom living trust is invalid because LegalZoom screwed up somehow — remember, LegalZoom isn’t your attorney and you are supposed to read your documents and understand the impact of the language contained in them. In other words, even if the trust form that they sell you is a bad form, you have no protection under this guarantee. Now doesn’t that give you peace of mind?

One comment

  1. Reblogged this on The Millennial Lawyer and commented:
    For All of you “DIY-ers”, this is a good read regarding DIY Estate Plans

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: