The cost of estate planning can vary greatly, depending on the complexity of the estate and how you go about doing it. The simplest estate planning can be completed online for a fraction of the cost of hiring an attorney.
However, many people will hire an attorney for estate planning to ensure they don’t make a mistake and that all of their wishes are clearly defined and covered. Let’s take a look at the different options for estate planning as well as the factors that go into determining the cost.
Estate Planning is Important
One of the biggest mistakes someone can make is not having a detailed estate plan. Discussing your death and that of your loved ones, and creating a plan for what happens when you or loved ones die, is certainly not an easy topic to take on. However, it’s crucial that you go through estate planning to protect your own interests and that of the members of your family.
If you don’t have an estate plan created, the beneficiaries of your estate could be tangled up in legal cases just to get access to what is rightfully theirs. When you have a detailed estate plan, there will be no questions about what your intentions were for all of your belongings.
A lack of an estate plan could also contribute to messy family fights. You can help avoid this, and protect your spouse and children, by creating a detailed estate plan.
Methods of Planning Your Estate
Today, you have the option of planning your estate entirely on your own and entirely online. Some providers have created step-by-step kits that you can follow to complete your estate plan. The major benefit to this is that it’s quite simple and cost effective. If you have a very simple estate, either because you don’t have substantial assets or you don’t have multiple heirs, this avenue could be a good fit.
However, if you have special instructions and want to make sure your estate is in good hands, then it’s probably more beneficial to hire an experienced estate planning attorney.
Online packages typically only create a will for you, and that won’t allow heirs to avoid probate, which could result in significantly higher fees and taxes for your heirs. An experienced attorney will be able to address any of the specific concerns you have, while also advising you as to the most advantageous way to leave behind your possessions when you are gone.
What Factors Increase the Cost?
Basic estate plans could be completed by an attorney for roughly $200. A more in-depth estate plan would probably be charged at an hourly rate that could top out at $300 an hour or more.
If you have anything but the most basic estate plan and wishes, you should expect to be charged an hourly rate for the work. How many hours the plan takes to complete will again depend on exactly what goes into your estate plan.
Some factors that could increase the cost include:
- Having underage children and will need to create trust funds
- Having previous marriages with or without children
- Owning lot of wealth and assets that need to be divided
- Owning a business
These are just some of the factors that could increase the time it takes to complete your estate plan, which, in turn, will increase the cost to prepare the plan.
How You Might Be Charged
Different attorneys may have different methods by which they charge you for preparing your estate plan. A common method would be the previously-mentioned hourly rate.
An hourly rate is typically used when it’s difficult for the attorney to estimate how long your estate plan will take. Again, this often happens in more complicated estate plans. You might be able to get a rough estimate of your total costs, or a cap on the costs so that you have some certainty with how much you’ll pay.
If you have a simpler estate plan, an attorney may charge a flat fee. This is a price that will be fixed for the attorney to complete your estate plan.
Oftentimes, the attorney will assess the overall general outline of your estate plan before setting up a fee schedule for the work. It’s also possible the attorney will use a hybrid model — charging a flat fee that covers you up to a certain number of hours, with an hourly rate added for every hour beyond that worked.
Can You Minimize the Costs?
There are some potential ways you could minimize the cost of having your estate plan created. One way is to choose an estate planning attorney who has a lot of experience in your state and in similar situations. You can often limit your overall costs this way because these attorneys will know what to do with each piece of the plan, thereby limiting the amount of time it takes them to prepare it.
You should also be upfront about the costs, and discuss with your attorney the full fee. Even if they charge an hourly rate, you can discuss a maximum amount you’d like to pay. Then, you and your attorney will be on the same page from the get-go.
It’s always important to get everything in writing, too, when you’re negotiating estate planning costs. This will give you an idea of what to expect, and will provide the same expectations for the attorney.
Work With an Experienced Financial Advisor
Our knowledgeable financial advisors at Good Life Financial Advisors of Mt. Pleasant can provide the tools and guidance to help you plan your estate’s finances for your family’s future. Contact us today to speak to our experts.
The opinions voiced are for general information only and are not intended to provide specific advice or recommendations for any individual.