Estate planning is one of the best ways to ensure our wishes are respected for who gets our money and personal property after we die. But how much does estate planning cost, and is it worth it for the average person? For nearly everyone, the answer is yes, some form of estate planning is a good idea. As retirement approaches, you may have questions about Estate Planning. Among the top questions, , how much will Estate Planning cost? Well, it depends on a lot of variables.
How Much Does Flat Fee Estate Planning Cost?
Estate planning doesn’t mean the same thing for everyone. For some people, it can be as simple as having a few basic documents. These will be a Will, a Power of Attorney, and an Advance Health Directive. These three documents will cover how your personal property is distributed when you die, give the power to make decisions to someone if you are unable to, and provide medical instructions to healthcare providers if you are ill or injured. Many estate attorneys offer these three estate planning documents in a package for a flat fee. If it is fairly simple, you can expect this to run anywhere from $200-$1,000 depending on where you live.
If you have a more complex estate, you’ll need more documents and more detailed estate planning. Three simple forms won’t be enough to bypass probate and protect your heirs from inheritance taxes and probate issues. Trusts, beneficiary designations, guardianships, and other legal documents may be needed, at which point the costs will go up.
An estate planning attorney may schedule an initial consultation in person or by phone for free to discuss your needs, then offer a flat rate based on that consultation. Rates may be based on pre-set packages or how many hours the attorney believes it will take to prepare all necessary documents. You can expect to pay anywhere from $2,000 to $5,000 depending on the documents needed and your estate’s complexity.
How Much Does Hourly Estate Planning Cost?
Hourly rates for estate planning are based mainly on the experience of the attorney and where you live. A top-notch estate attorney in New York City with 15 years’ experience will be able to charge more per hour than a junior lawyer at a firm at a small town in the Midwest. However, hourly rates for an attorney with an estate planning background start at about $150 an hour. The average in most areas is $250-$300 an hour.
Creating an estate plan takes time, so be sure schedule a free consultation with at least three different estate planning attorneys. Don’t hire based on their hourly fee without asking each of them how many hours they estimate it will take to finish planning your estate.
How Much Does NOT Having an Estate Plan Cost?
While the cost of hiring a lawyer to draw up your will and other estate documents may seem high, consider the alternatives. There are programs you can use online and software you can download that will help you prepare a simple Will or Power of Attorney. Some of these are free, while others charge you a small fee. You can also purchase do-it-yourself estate kits and software for around $50-$250, but you will need to make sure the information is current. It would help if you also run them by an attorney to make sure they are legally correct, which will end up costing you at least a few hundred dollars.
Probate in most states can eat up several thousand dollars when you die, which your heirs will have to pay. Inheritance taxes in some states can eat away at even more of your estate. It also usually means months of waiting before your descendants can inherit. In many cases, there are also family disputes if your wishes aren’t clearly outlined, which can lead to bad blood and ruined family relationships. It’s an emotional cost that can be paid by your family for years.
When You’re Ready to Talk About Estate Planning Costs
Talk to several estate planning attorneys before deciding to move forward with your will or other estate documents. Ask for a consultation; most lawyers will offer a free, initial consultation by phone or in person for 30-60 minutes. If there is a charge, it is generally deductible from your estate planning costs if you choose to work with them. A few things to consider:
- If they offer a flat fee, ask what is included, including how many rounds of changes.
- Ask if they are preparing the documents or if an associate will be preparing them.
- Get all estimates in writing.
- Ask if they will charge extra for phone calls if you have questions between meetings.
- If they charge by the hour, ask for an estimate on how long it will take.
- Ask if their rates include court filing fees.
One of the best ways to find out how much estate planning will cost you in your area is to talk to friends and relatives who have gone through the estate planning process. If they are comfortable discussing how much they have paid, ask them whether they were happy with the legal advice and the legal documents they received. Ask them whether they stuck with basic estate planning or used more complex estate planning services. For most people, spending even a few thousand dollars now is well worth saving their loved ones’ time, money, and possible problems in the future.