Estate plans aren’t cheap. But exactly how much you’ll spend depends on a multitude of factors — the complexity of your overall needs, the experience of the attorney involved, and your geographic location, since costs can vary greatly across various regions.
Fortunately, however, there are steps that consumers can take to better understand, and consequently reduce, potential estate planning costs.
1. Understand What You Need
Before you begin the estate planning process, have a sense of what you need. It can be helpful to talk to your financial advisor or to do some reading on estate planning so you understand the basics before you move forward.
At minimum, you’ll want an advance directive for health care, a durable power of attorney, and a will. Many people also want or need trusts. For most of these documents, you’ll need an attorney to make sure they are properly prepared and implemented. One exception is the advance directive for health care: Most states offer a version online that you can implement on your own.
2. Talk Money Up Front
Even before an initial meeting, contact any potential estate planning attorney to determine how he or she charges. Attorneys may charge by the hour or offer a flat-fee service.
If the attorney charges by the hour, ask what the applicable hourly rate is, and get a sense of how long it will take; a lawyer should be able to give a general range for estate plans that cover what you and your family need.
Ask attorneys whether they offer a free consultation. Some will, others won’t. And some attorneys may charge for a consultation, but then apply that amount to the ultimate fee if you decide to go forward.
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3. Understand Flat Fees
Flat fees can be advantageous because they provide certainty and let you understand how much the estate planning process will cost you. Make sure you understand what is included in the fee, however, and what is not.
For example, a flat fee may only apply if the estate plan is completed within a certain period of time (say, six months); typically it includes only a certain number of meetings, or a certain number of changes to critical documents once they are prepared.
Flat fees also usually depend upon the type and number of documents that make up your estate plan. As you can imagine, the greater the number of documents you need, the more complex the estate plan becomes –and the higher flat fee you’ll pay.
4. Choose the Right Attorney
The qualities that matter most here are experience and rapport. Generally speaking, you want an attorney who has experience dealing with situations similar to your own, so don’t be afraid to ask specific questions in this regard.
As for rapport: Because estate planning involves discussions of family relationships, finances, and mortality, it’s important to choose someone with whom you feel comfortable disclosing these details. If you don’t communicate all pertinent information to your attorney, you could wind up with a flawed estate plan, leaving beneficiaries either too much or too little access to assets.
Remember that you don’t always want the cheapest option. A skilled estate planning attorney may charge a higher price, but end up saving you money in the long run. If you become ill at some point and need help managing your finances, a good estate plan can ensure this happens in a cost-efficient manner, obviating the need for a court-appointed guardianship or conservatorship. (These can cost thousands of dollars to implement and maintain, easily outweighing the cost of an estate plan.)
A proper estate plan may also end up saving thousands of dollars for your family in probate costs.
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5. Come Prepared — and Decisive
Before your first meeting, ask your attorney what documents and information you need to bring to your meeting. The less time your attorney needs to spend gathering information, the less money you’ll ultimately end up spending.
Changing your mind once the documents are drafted can increase fees, so be prepared from the outset to answer pointed questions. Who will make your health care decision if you’re incapacitated? Who should be the guardian of your children? Who should manage the assets for your children? How do you want to leave assets to your children?
As a general rule of thumb, the more time that passes from the beginning to the end of the estate planning process, the higher the fees tend to be. So the more quickly you can make decisions and have your documents finalized, the less time the attorney will need to spend refreshing his or her recollection of your specific situation because too much time has passed between meetings.
The cost of estate planning may seem intimidating, but don’t let it deter you. Remember that estate plans are critical to your assets and your family. Practicing these recommendations will not only make your estate plan more attainable, but can secure the future of your family and property.