Understanding Estate Planning Costs
Estate planning is the perhaps the smartest move you can ever make to safeguard your loved ones after you pass on, and ensure your care in case of incapacity. The truth of the matter is that estate planning is not a cheap affair. In fact, a recent survey confirmed that more than 66 percent of Americans consider estate planning to be out of their reach.
If you have been putting off the idea of planning your estate, the chances are that you are concerned with the associated costs. So, how much does estate planning actually cost? Right off the bat, I must confess that the cost of an estate plan can vary significantly depending on a number of factors, including whom you choose to be your attorney.
The trick to keeping estate planning costs low is to start small and bring in additional features later. If you want a basic estate plan, for instance, start off with a combo of Healthcare Durable Power of Attorney (popularly referred to as healthcare PA) and Durable Power of Attorney. As you might expect, this package will not give your family 100% peace of mind.
Take It Up a Notch
Once you’re ready to take the next step, it’s high time to add beneficiary designations, Paid on Death and Transfer on Death Accounts, as well as beneficiary deeds. The good thing about these additional estate planning documents is that they’ll help your loved ones inherit your estate without the need to go through probate process (which is a huge headache).
To make sure that estate transfer is as smooth and hassle-free as possible, it’s also wise to add a well-structured Last Will and Testament. These two documents will go a long way to protect your loved ones and make sure your assets to go the right person at the right time without the interference from courts and judges.
Revocable Living Trust
For most people, including a Revocable Living Trust is the last step in estate planning. And for good reason. RLT is not only one of the most complex documents in estate planning, but it can also become quite expensive to draw up.
All in all, drawing up an estate plan is a significant financial undertaking. All of the documents above are complex in their own right, and even a slight mistake can jeopardize the whole Trust. If you want to get a good picture of how much estate plan will cost you, however, it is important to seek counsel from a reputable estate planning attorney.
4 Secrets to Saving On Estate Planning Costs
Tip #1. Talk About the Fees Up Front
Most estate planning attorneys offer a free, no-obligation consultation. Even before you go to this meeting, call or email your potential attorneys to inquire about what and how much fees they charge. Most attorneys charge a flat-rate fee or by the hour. If he or she charges by the hour, for instance, inquire further about the rate and get an idea of how long the process will take.
Tip #2: Get to Know What You Need
Before you meet with an attorney, it pays to get a feel for what you need in your estate plan. It might be helpful to consult with your financial advisor or read up on estate planning material. Either way, be sure to know a little about the durable power of attorney, healthcare durable PA, last will, testament, and perhaps trusts.
Tip #3: Be Decisive and come Prepared
Inquire about what you need to bring to the attorney. Do you have to pay for an initial consultation? Will you pay the attorney fees up front? Get answers, but most importantly, meet your attorney when you are fully decided.
Tip #4: Hire the Right Attorney
Not all estate planning attorneys are created equal. Get recommendations from friends, family or colleagues you trust. And don’t just take their word for it -- it’s best to read reviews, contact references, etc. before making the hiring decision.