When people ask this question, the most common assumption is… LOTS of money! But the truth is, what you spend for an estate plan will vary as widely as the quality of the estate documents themselves. Logically, ‘cheap’ plans in the $500 to $1,500 range generally aren’t very sophisticated and leave out the most important protections and benefits. At the higher end of the scale, you might expect to pay $5,000 to $10,000 for the kind of complex planning appropriate for higher net-worth individuals.
Ironically, how MUCH you pay for your estate planning documents does not necessarily indicate their quality. In fact, Estate Planning is a ‘Buyer-Beware’ marketplace. According to the American Bar Association (ABA) and Martindale.com, only 3% of attorneys are competent in the area of tax and estate law. How can we, as consumers, know with certainty that we’re getting the highest levels of competence and care we deserve?
Understanding Estate Planning
Simply put, Estate Planning is the process of arranging your legal and financial affairs in a way that accurately reflects your goals, needs, and circumstances – and avoids Probate. You get to decide who receives your estate, how and when, while protecting everything you own from future generations’ creditors, judgments, lawsuits, and divorces. We use Trusts to control, manage, protect and distribute your assets to your children and other beneficiaries.
Powers of Attorney let you name the people your trust to make medical and financial decisions for you if you’re incapacitated. And finally, your Last Will and Testament serve as a ‘safety net’ ’ in the event forgotten assets are left out of the Trust.
Without a proper estate plan in place, the laws in your State will likely determine who gets your assets. All kinds of strange and unintended outcomes can occur according to the Laws of Intestate Succession, at the Probate Judge’s discretion. Your family members could wind up in conflict and it could take longer and cost more than it should settle your estate.
There are a variety of ways to avoid Probate, and each comes with its own set of pros and cons. For example, Joint Tenancy with Rights of Survivorship works well at the first death – passing ownership automatically to the survivor but fails at the survivor’s death. Joint Tenancy can also produce unintended consequences involving joint and several liabilities. Beneficiary designations are another common method for avoiding Probate court.
Working with a competent Estate Planner can help ease the process of putting the right legal documents in place that will help to produce the results you desire. Just make sure they know what they’re doing!
Do I Want a Will or a Trust?
The main difference between a Will and a Trust is that a Will must be Probated under the supervision of a Judge in what is essentially a PUBLIC process. Assets transferred into your Trust will avoid Probate and remain PRIVATE. Trusts allow you to decide exactly WHO gets WHAT, HOW, and WHEN you want them to get it, without the expense and delay of Probate.
Most Trust Packages include a ‘Pour Over Will’, which allows the Trustee to ‘pour over’ forgotten assets into the Trust. Your Will also contains Guardianship appointments and for any minor children.
Wills take on average 15 months to settle in the State of Arizona. Probate court can be time-consuming and expensive. Trusts can be administered as soon as the Death Certificate(s) are received, at little or no cost.
There are two basic forms of Trusts – the Revocable Trust and the Irrevocable Trust. Simply put, most people create Revocable Living Trusts because they can be easily amended or revoked during your lifetime. Upon death, most Trusts become Irrevocable, which means they can no longer be changed. As you might guess, Revocable Trusts do NOT protect your assets while you’re alive but do a great job of protecting assets for your children upon your death, once they become Irrevocable.
What’s the Cost Difference Between a Will Package and a Trust Package?
A Will Package, which also includes Medical and Financial Powers of Attorney, might run between $1,000 to $1,500, depending on your location and the options you choose. However, Probate Fees will generally run between $2,500 and $5,000, depending on who you select to do the work and whether the Probate is Simple or Contested.
When working with a competent estate planner to prepare a Trust Package, you might expect to invest somewhere between $2,500 and $5,000, depending on the complexity of your situation.
While the cost may initially be higher for a Trust, the Probate fees required by the Will often far exceed the cost of a well-designed and implemented Living Trust. Thus, a Trust may be the more cost-effective option over the long haul. Everyone’s situation is different, of course. Give Life Planning Inc. a call to schedule a no-cost, no-obligation consultation. We’ll answer all your questions and give you enough legal information to make fully informed decisions.
Work with a Competent Estate Planner
If you’re an adult, single or married, with or without kids, and you haven’t set up an estate plan for yourself – or looked at that dusty old trust you created years ago – now’s a great time to get some clarity and peace of mind around your earthly affairs. Life Planning, Inc. is uniquely equipped to serve your estate and business planning needs with the highest levels of competence and integrity. During your no-cost, no-obligation consultation we’ll evaluate your unique circumstances and help you clearly understand your options.
Life Planning, Inc. is a Certified Legal Document Preparer with 27 years’ experience preparing Wills, Trusts, Powers of Attorney, and LLCs for people just like you. We offer world-class service and best-in-class results – better, faster, and more cost-effectively than the rest.
So, why overpay and be underserved? Contact us today to schedule your no-cost, no-obligation consultation. We’ll answer all your questions and give you the legal information (not advice) you’ll need to make fully informed decisions for yourself.
Warner Lewis III