When asked about whether or not they’ve set up an estate plan, many people will say that they can’t because it costs too much. In fact, most Americans don’t have a will. Oftentimes, the perceived unpleasantness, price, and time commitment required for an estate plan will deter people from even wanting to talk to an attorney. But how much does estate planning really cost?
Different Methods of Charging Clients
Depending on your location and the complexity of your financial and family circumstances, a lawyer might ask for anything up to several thousand dollars for estate planning documents, including a will. Estate planning attorneys won’t all charge their clients the same amount or the same way.
“With the state of the economy, you shouldn’t be surprised if the attorney does charge a small fee for the initial meeting with you,” says Julie Garber, an experienced estate planning attorney. “Keep in mind that the estate planning attorney is also a business man or woman, and so time spent with you takes time away from billable time on other client matters.”
Many lawyers will charge you a flat fee for writing a will and providing other estate planning documents. A price of $1,000 for a simple, attorney-drafted well is not uncommon, but you may also be looking at $1,200.
By the Hour
Other estate planning attorneys will bill their clients hourly. This rate will, of course, mainly depend on the professional’s training and experience and your location. Small town lawyers may charge as low as $150 per hour, while most lawyers in a city wouldn’t go under $200.
Lawyers working for big firms usually charge more than small firms or sole practitioners unless the small firm specializes in advanced tax matters and estate planning. A lawyer who specializes in estate planning will usually cost more.
Though some may find the process uncomfortable, you can’t put it off. Excuses about waiting until you’re less busy or until you get sick won’t do you any favors. When you don’t have a will, the legal system in your state will handle the process for you. The issue here is that a judge will be making the choices that should be made by you. And the assets you’d prefer to go to a loved one will be spent on court costs or taxes.
Need More Than a Simple Will? Estate Planning Packages are Available
Odds are, you will need more than just a will and your lawyer will advise you to have additional documents made. Your will is just a single element of your entire estate plan. This will be your heirs’ guide for handling you or your possessions when you pass on or become gravely incapacitated.
Creating an estate plan is often one flat free to prepare all of the necessary documents. While every situation is different and no final numbers can be decided without agreement, plans most commonly cost between $1,000 and $5,000. The estate planning process usually only requires two or three meetings with the lawyer. Once it’s done, you will have a plan for the next few decades.
You might be tempted to do this all yourself, but that’s a risky choice. The best option is to hire a professional. It’s crucial to find a lawyer you trust to help you create your estate plan; someone you’re comfortable talking with when major life changes come up that could affect it.
Why Create an Estate Plan?
When you pass away, a professionally drafted estate plan would mean your belongings and assets go directly to your beneficiaries and heirs. If you don’t have a plan, however, your estate could go to probate administration. This could cost a few thousand dollars or more, and freeze your assets, delaying your heirs from receiving them.
Probate administration often takes a long time. The average situation requires at least half a year or longer if tax complications, litigation, or other issues come up. This can be an expensive and complicated process, which is a major reason why people choose to avoid it by creating an estate plan. Every adult individual should have an estate plan made to avoid probate and protective proceedings, as the cost of these (in stress, energy, money, and time) will inevitably exceed the cost of a plan. A prepared estate plan will:
Establish Estate Trustees: In order for everything to be handled correctly, someone must be appointed as executor of the estate. In your plan, you’ll get a chance to name this person, simplifying the administration process and saving money.
Reduce Taxes on your Estate: When you have a plan ready, it’s likely you can minimize taxes collected on the estate. This means your beneficiaries can keep more of what you have saved for them.
Don’t Let Your Plan Go Stale
Even the most professional plans need to be refreshed every once in a while. When you’re done creating your estate plan, it’s tempting to put it away and forget about it. The problem is that the families and individuals who do this might think the documents don’t require any more thought. But life always brings changes, whether it’s with the tax code, family matters, health, or finances. And not keeping your plan up-to-date can have serious consequences.
“In some cases, outdated or inadequate estate plans have led to highly-publicized disputes between heirs that have squandered fortunes and diminished legacies,” said Russ Alan Prince, financial consultant and Forbes contributor.
Even when no major changes strike, you should review your plan every two years or so, working with a professional who can help you modify it as needed. Keeping your estate plan updated will ensure that everything goes where it’s meant to go when the time comes.
Call our Estate team at (480)467-4325 to discuss your case today.