Estate Planning cost and landmines?

[karel]

Looking to do an estate plan for myself and spouse, somewhat complicated due to blended family with adult children from each of us. Estate planning focused attorney is offering to do a full estate plan for $4000, including setting up a trust, powers of attorneys, health care powers of attorney, funding the trust, etc. Also this fee would include future changes to the trust as things evolve and plans change over time. Curious as to what others have paid or would expect to pay for this? Is a flat fee typical for this kind of work?

Also, anybody else have strong opinions on positives and negatives of using a trust for estate planning versus alternatives? Anything else to be aware of?

Thanks for the thoughts!

 

[SecondCor521]

It really depends on the cost of living where you are. I paid about $500 for my most recent will, but that was 15 years ago, didn't include a POA and didn't include funding a trust. I was also in a low to medium COL area at the time.

Personally I would be wary about the fact that the price includes future changes. Usually that is not included and is just pay as you go, not prepaid.

Whether or not to use a trust or trusts depends on way too many factors - state law and your situation, and sometimes what the estate attorney is familiar with. Also, there are lots of different kinds of trusts, so it's not just "trust or no trust", it's revocable vs irrevocable vs special needs vs Crummey vs intentionally defective grantor vs bypass vs marital vs etc. etc.

Read a couple of Nolo Press estate planning books so you're familiar with the terminology, options, and common scenarios. Figure out with your spouse what you want. Schedule a few introductory sessions with a few different estate attorneys - I wouldn't just pick the first one as there can be quite a variance in ability and price.

 

[Car-Guy]

We paid $500 for all that, but it was ~25 years ago, so a few thousand dollars sounds about right now.

 

[Sunset]

I second the idea to first read a few books on Wills and Estate planning, so you know what is possible and what is not possible.
Then decide what you want..

Remember, accounts (banks/brokerages/houses) that you put TOD/POD on are not part of the estate for the Will or a Trust (unless of course it is POD to the Trust).

Myself I POD most stuff to DW. Then my Will allocates some to various relatives with the remaining going to DW.
Same for her.

Not going to bother with a Trust as it's too hard to control the $$ from the grave, beneficiaries may just spent $$ trying to break the Trust, It will require updating now and then at a cost. Then administrator of the Trust will be making $$$ from doing the work each year. Taxation is expensive for a Trust (I think).

 

[OldShooter]

I think the fee is in the ballpark of what we've paid for a highly qualified specialist.

Re "using a trust" there are lots of flavors of trust. Possibly the attorney is referring to a simple revocable ("rev") trust prior to yours & spouses deaths. In our case, we have rev trusts for me and for DW. Both the attorney and DW seemed to view it as a sort of routine thing. (DW retired as a SVP from a megabank trust department and is an expert on her own.) But there are lots of other trusts like charitable remainders, QTIPs, etc. Rev trusts become irrevocable upon our deaths. In our case, after both deaths, four new irrev trusts are created, one each for DS and three grands. One of the grands trust is a special needs trust. So it's complicated.

IMO the most important thing is the attorney's experience. You want someone with some miles on him/her, who has seen and dealt with a lot of trust and estate problems including court challenges. SGOTI cannot help you with any of that, especially because SGOTI is not hampered by any detailed knowledge of your situation. Educating yourself is great, the more the better. Putting huge energy into finding and hiring the right attorney is paramount. From there, put yourself in the attorney's hands. Ask questions, especially about unforeseen events like people dying out of order, becoming incompetent, getting divorced or married, children reaching majority ... The list is endless. Finally, assuming nothing in this process has soured you on the attorney, do what they recommend.

 

[karel]

Thanks for the great comments.... have a fair amount of education to do on this subject.

 

[Dash man]

A few years ago we paid $3,500 for all that, plus an update last year was $1,900. It was a significant update. I’m sure the price your attorney has limits on any updates they will do included in the price. Clarify it with him.
We also had a blended family, and depending on state laws, it can get very complicated.

 

[Car-Guy]

Related to this topic: FWIW

I was a little concerned that the wills my mom and dad had made ~40 years ago, may not hold up in court "these" days. Laws change etc. My mom passed away first and my dad never had her will probated... A few years later when my dad passed away, I began to wonder if I was going to run into any problems with probating both wills. I didn't. Judge accept both wills without question and the probate lawyer accepted my check for handling the probate.

Knowing what I know now, since almost everything was either POD or TOD, I should have never gone through the probate process. Could have save myself ~12k. Live and learn.

 

[mrfeh]

Looking to do an estate plan for myself and spouse, somewhat complicated due to blended family with adult children from each of us. Estate planning focused attorney is offering to do a full estate plan for $4000, including setting up a trust, powers of attorneys, health care powers of attorney, funding the trust, etc. Also this fee would include future changes to the trust as things evolve and plans change over time. Curious as to what others have paid or would expect to pay for this? Is a flat fee typical for this kind of work?

Also, anybody else have strong opinions on positives and negatives of using a trust for estate planning versus alternatives? Anything else to be aware of?

Thanks for the thoughts!

Been considering what type of document we need for many months now (will vs trust) and have spoken to many attorneys over this time. $4K is in line with the numbers we're being quoted.

 

[Badger]

We had trusts, wills, POA, etc. drawn up 19 years ago but I don't remember the cost.
Since then we have named beneficiaries for all of our investments. Now everything is covered by the trusts and beneficiaries.
The idea was to safeguard our investments from litigation yet make the bulk of our investments readily available to the beneficiaries at our passing.
In the event that we were to be sued we would take all the available funds not covered in the bank and take a long cruise.
I hope that works but maybe there is a flaw in the plan that someone could point out. Otherwise this is an idea for the OP

Cheers!

 

[Stormy Kromer]

DW and I paid about $4k in 2018. Sounds similar.

The biggest job we had was to come up with a balance sheet and split assets as even as possible to 50-50 between our trusts. We had to title some jointly held real estate parcels into our individual trusts. That added to the cost. It was our responsibility to update our bank and brokerage accounts to name the correct trust as owner and add beneficiaries and TOD...

We live in a state with a lower threshold for estate tax so that added to the planning quite a bit.

The attorney also told us that it was up to us to stay on top of the trust assets to keep them as close to 50-50 as possible. We did have to switch some real estate parcels this year after they appreciated some.

Just because you go through the process it doesn't mean your done. An annual review of the balance sheet is a good idea, so is keeping up on beneficiaries and TOD.

We currently would avoid probate due to the trusts, beneficiaries and TOD accounts.

 

[The Cosmic Avenger]

Sounds about right, we paid $4,800 in 2016 in a HCOL suburb for almost exactly the same estate plan.

 

[PaunchyPirate]

The trust is the expensive item in this setup. If you truly need/want a trust, then the price seems about right. If you don't need a trust, then basic estate documents should be much less expensive than $4000. In my low cost of living town, I paid about $600 for my estate plan documents (no trust involved).

 

[FLSUnFIRE]

That's in the ballpark that my parents paid. Trust set up with successor trusts, spill over will, recording the new deed for their house, durable POA (very specific for various purposes to make as acceptable as possible to various institutions). Firm is specialized with a team of attorneys based in the state and offered 1 year free amendments and free consulting/assistance to cotrustee upon death of the trustmakers. Family dynamics are good and they made the POA immediate and also added me on most of their accounts and safe deposit boxes so if I need to step in I can immediately hit the ground running without having to get certification of incapacitation or death.


I think it was more a relief for me to have this in place than for them. I'm so glad we got it done. My siblings are also on board and as listed as successor trustees with my dad and me as co-trustees. I don't look forward to stepping up but it should be about as easy as possible on the business end if I can get through the emotional aspect with my sanity.


Now if I could get them to start clearing out the attic and closets....

 

[Midpack]

Our trust cost $3500. Money well spent IMO.

While it’s significant money, getting it wrong would be a serious issue. The last thing I’d want for those we leave behind is ending up in probate or with some sort of dispute. I want to know our estate is exactly as we intend and resolved as easily as possible.

My parents had a trust and when they passed, it was very easy for my sister and I, as our parents intended.

 

[Sunset]

If a person wants to avoid probate, then TOD/POD beneficiaries can be defined for most (all?) bank accounts, brokerages, insurance policies, and even real estate in many States.

Then in many States, the remaining items can be distributed as a small estate not requiring Probate or even a lawyer, by following the Will.

 

[USGrant1962]

If a person wants to avoid probate, then TOD/POD beneficiaries can be defined for most (all?) bank accounts, brokerages, insurance policies, and even real estate in many States.

Then in many States, the remaining items can be distributed as a small estate not requiring Probate or even a lawyer, by following the Will.

Well, Vanguard at least will not allow beneficiary designation on Joint accounts.

 

[Sunset]

Well, Vanguard at least will not allow beneficiary designation on Joint accounts.

That makes sense, as the Joint person would automatically own the assets upon the death of the other person.

So, yes, a Joint account is another way to avoid Probate, but does have the risk of the Joint person stealing the money early.

Of course a Joint account fails to avoid probate if both holders of a Joint account die together.

We don't have Joint accounts. Just Joint ownership of the house.

 

[wolf]

California. Bay Area. Paid around $3500+. Semi-complicated Trust. Lawyer specialise in
Estate. Included what OP mentioned. But not future changes. Last Year. 2022,

What we did. We wrote our "wish" list. Wrote down in normal english what we wanted.
How assets to be divided. When how. Instructions to Trustee.
Our situation involved younger adults. So Trustee would manage
Trust until young adults reach certain age. Or sooner if they became
responsible sooner. Payments to Trustee, ....etc...


Lawyer: Then converted my "wish list" into "legalise lawyer words". For the Trust.

My "funny" take. I understand every thing I want to be done is in the Trust.
BUT for Trustee. They would have trouble understanding
what my desires are and the power I've given to them. Ha..

OH, well, wife and and I are gone....so be it...

 

[Tailgate]

$1,800 here in central TX. 2 wills, 2 POA's, 2 Medical Directives/HIPPA releases. Attorney certified in elder law.

 

[OldShooter]

... My "funny" take. I understand every thing I want to be done is in the Trust. BUT for Trustee. They would have trouble understanding what my desires are and the power I've given to them. Ha.. OH, well, wife and and I are gone....so be it...

We have done a couple of things about that. First, our attorney is about 20 years, maybe 30 years younger than we are, increasing the odds that she will be around when we're not. There is also another attorney in her firm that knows us and whom we trust. Second, we have named a trusted family friend, also younger, as "Trust Protector." Among other things, she has the power to remove and replace trustees.

 

[Lucie]

Check if your employer offers a legal plan as part of the employee benefits. We have the MetLife legal plan (formerly Hyatt plan) and they cover estate planning, as well as other legal coverage for free if you participate. We used them to set up (and later revise) our trust, well as for real estate and my son’s speeding ticket. Open enrollment for benefits should begin soon for 2024.

 

[LateToFIRE]

Think we paid about $8,000 and that was 20 years ago. But, there is some complexity to our plan - and - we are using a biglaw attorney. We'd previously had a one-lawyer outfit but became concerned about the level of service our executor would receive in th unlikely event both DW and I met an early demise at exactly the same time (ex. car, plane accident, terrorist attack). We wanted the full resources of a larger firm to be available, both to us and/or the executor. We update the plan every few years, generally costs $2500, but keep in mind we're talking about ~$850/hour for a top attorney. Might not be worth it to most, but worth it to us having managed the estate/probate process for our parents and others. What we learned is that the real work starts at the end.

 

[Stormy Kromer]

FWIW, the DW's parents had updated their estate plan in the months before the first passed. They lived very modestly and didn't have large bank accounts and $0 investments, but they did own some farmland that had appreciated a great deal. It would have put them over the estate tax limit. The attorney set them up with a Disclaimer Trust so when the first passed 50% of the assets went to that trust, when the second passed the remaining assets and the trust assets were treated separately and kept the amount under the state limit for estate taxes. Avoided probate too.

What I'm trying to say is that the $5,000 or so that they spent getting their wills & trusts in the long run was well worth it for the surviving heirs.

 

[CRLLS]

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