Why DIY Legal Documents Often Create Bigger Problems in Ontario

Do-it-yourself (DIY) legal documents are increasingly popular, with many online services offering templates for wills, contracts, shareholder agreements, and more. While these can seem like a cost-effective solution, they often create bigger problems than they solve, especially in Ontario where specific legal requirements must be met. This article explains the risks and when professional help is essential.

The Appeal of DIY Legal Documents

DIY legal documents are attractive because they appear to be:

• Cost-effective: Much cheaper than hiring a lawyer
• Convenient: Can be completed quickly online
• Accessible: Available 24/7 without appointments
• Simple: Seem straightforward and easy to understand

However, the reality is often more complex.

Why DIY Documents Fail

Ontario-Specific Requirements

Ontario has specific legal requirements that DIY templates may not address, including:

• Wills: Must be properly executed with witnesses, and Ontario has specific rules about holographic wills
• Powers of Attorney: Must comply with the Substitute Decisions Act and use specific forms
• Corporate Documents: Must comply with the Ontario Business Corporations Act and specific filing requirements
• Real Estate: Must comply with FINTRAC requirements and other regulations

Generic templates may not account for these Ontario-specific requirements.

One Size Doesn’t Fit All

Legal documents should be tailored to your specific situation. DIY templates are generic and may not address:

• Your unique family circumstances
• Your specific business needs
• Complex asset structures
• Tax considerations
• Dispute resolution preferences

Missing Critical Provisions

DIY templates often miss critical provisions that could protect your interests, such as:

• Proper dispute resolution mechanisms
• Tax planning considerations
• Protection against common pitfalls
• Compliance with recent legal changes

Execution Errors

Even if the document is well-drafted, execution errors can invalidate it. Common mistakes include:

• Not having proper witnesses
• Not signing in the right place
• Not dating the document
• Not following required procedures

Common DIY Document Problems

DIY Wills

Common problems:

• Not properly executed (invalid will)
• Missing important provisions (like guardianship for minor children)
• Not accounting for tax implications
• Creating unintended consequences (like disinheriting children from previous relationships)
• Not being updated as circumstances change

Real consequences:

• Will may be invalid, leading to intestacy
• Family disputes and litigation
• Higher taxes than necessary
• Assets going to unintended beneficiaries

DIY Shareholder Agreements

Common problems:

• Not addressing all relevant issues
• Provisions that conflict with the OBCA
• Missing dispute resolution mechanisms
• Not accounting for future scenarios
• Provisions that are unenforceable

Real consequences:

• Disputes that can’t be resolved
• Corporate deadlock
• Expensive litigation
• Business failure

DIY Contracts

Common problems:

• Missing key terms
• Unclear or ambiguous language
• Terms that are unenforceable
• Not accounting for Ontario law
• Missing dispute resolution provisions

Real consequences:

• Disputes about what the contract means
• Unenforceable terms
• Expensive litigation
• Lost business opportunities

DIY Corporate Documents

Common problems:

• Not complying with OBCA requirements
• Missing required filings
• Incorrect share structures
• Not maintaining proper records
• Missing compliance requirements (like ISC Register)

Real consequences:

• Corporate non-compliance
• Personal liability for directors
• Difficulty raising capital or selling the business
• Regulatory penalties

The Hidden Costs of DIY Documents

Fixing Problems Costs More

Fixing problems created by DIY documents often costs more than having them done properly in the first place. You may need to:

• Hire a lawyer to fix the document
• Litigate disputes
• Pay penalties for non-compliance
• Restructure arrangements

Lost Opportunities

DIY documents may not take advantage of opportunities for:

• Tax planning
• Asset protection
• Efficient structures
• Dispute prevention

Family and Business Disputes

Poorly drafted documents can lead to:

• Family disputes
• Business partner conflicts
• Expensive litigation
• Damaged relationships

When Professional Help is Essential

Complex Situations

Professional help is essential when:

• You have a blended family
• You own a business
• You have significant assets
• You have tax planning concerns
• You have specific goals that require customization

Legal Requirements

Professional help is essential to ensure:

• Documents are properly executed
• All legal requirements are met
• Documents comply with Ontario law
• Documents are enforceable

Risk Management

Professional help can help you:

• Identify and address risks
• Plan for contingencies
• Avoid common pitfalls
• Protect your interests

The Middle Ground: When DIY Might Be Acceptable

DIY documents might be acceptable for:

• Very simple situations with no complexity
• Temporary arrangements
• Documents that will be reviewed by a lawyer
• Situations where the cost of professional help truly isn’t justified

However, even in these cases, having a lawyer review the document is often advisable.

Key Takeaways

• DIY legal documents often create bigger problems than they solve
• Ontario has specific legal requirements that generic templates may not address
• One size doesn’t fit all—documents should be tailored to your situation
• Execution errors can invalidate otherwise good documents
• Fixing problems often costs more than doing it right the first time
• Professional help is essential for complex situations and to ensure compliance

Related Content

• Estate Planning & Trusts in Ontario
• Corporate & Business Law in Ontario
• When Courts Step In: How Judges Override Private Legal Documents

This article is for informational purposes only and does not constitute legal advice. Every situation is unique, and the information here may not apply to your specific circumstances. For advice tailored to your situation, consult with a qualified legal professional licensed to practice law in Ontario.