Estate planning is an essential process that helps individuals plan for the management and distribution of their assets after they pass away. Estate planning involves creating wills, trusts, powers of attorney, and other legal documents that specify how your assets should be distributed, who should make decisions on your behalf if you become incapacitated, and other important details.
One of the most common questions people have about estate planning is, “How much does it cost”. The answer is that the cost of estate planning can vary widely depending on several factors, including the complexity of your estate, the type of legal documents you need, and the attorney’s fees.
The Cost of Basic Estate Planning
A basic estate plan typically includes a few important documents that outline your wishes for your assets and healthcare in the event that you become incapacitated or pass away. While a basic estate plan is a good starting point for many people, it’s important to note that everyone’s situation is unique, and you may need additional documents or strategies depending on your specific circumstances. Consulting with an estate planning attorney can help ensure that your wishes are properly documented and legally enforceable.
Here are some common components of a basic estate plan:
- Last will and testament: The last will and testament outlines how you want your assets distributed after your death, and can also name a guardian for any minor children.
- Power of attorney: This document gives someone else the authority to make financial decisions on your behalf if you become unable to do so.
- Health care directive: Also known as a living will, this document outlines your wishes for medical care in the event that you become unable to communicate them yourself.
- Beneficiary designations: These are instructions you provide to financial institutions and other entities regarding who should receive any assets you have with them upon your death.
The cost of basic estate planning can range from a few hundred dollars to a few thousand dollars, depending on your location and the attorney’s fees. These baseline costs can also vary depending on unique situations that may present themselves. Some attorneys charge a flat fee for basic estate planning, while others charge an hourly rate. The average cost of basic estate planning is around $1,500, but it can be higher or lower depending on your circumstances.
A trust is a legal arrangement in which one person (the “trustee“) holds and manages property or assets for the benefit of another person (the “beneficiary”). The person who creates the trust is known as the “grantor” or “settlor.” Trusts are primarily utilized as a means of asset protection as part of the estate planning process.
The Cost of Trusts
The cost of a trust can vary depending on a number of factors, including the complexity of the trust, the size of the estate, and the specific needs of the trust’s creator (also known as the grantor).
For a basic revocable living trust, which is the most common type of trust, the cost can range from a few hundred to a few thousand dollars, depending on where you live and the attorney you work with. More complex trusts, such as irrevocable trusts or special needs trusts, may cost more.
It’s important to keep in mind that while the upfront cost of creating a trust may seem high, the long-term benefits can be significant, particularly if you have a sizable estate or want to ensure that your assets are distributed in a certain way. The cost of not having a trust, such as probate fees and legal challenges, can often be much higher in the long run.
What is Probate?
Probate is the legal process by which a deceased person’s assets are distributed to their heirs or beneficiaries. The purpose of probate is to ensure that the deceased person’s debts are paid and their assets are distributed according to their wishes or, if they did not have a will, according to state law.
During probate, a court will oversee the distribution of the deceased person’s assets. The court will appoint an executor or administrator to manage the process, including paying any debts or taxes owed by the estate and distributing the remaining assets to the beneficiaries.
The probate process can be lengthy and complex, and can involve a number of fees and expenses, including court fees, attorney fees, and executor fees. In addition, probate can be a public process, which means that the details of the deceased person’s assets and debts are part of the public record.
To avoid probate, many people choose to create a trust, which allows assets to be distributed without going through probate. It’s important to consult with an estate planning attorney to determine whether a trust or other probate-avoidance strategies are appropriate for your specific situation.
How much could probate cost?
The cost of probate can vary widely depending on several factors, including the size and complexity of the estate, the state where the probate is taking place, and whether any legal disputes arise during the process. Here are some of the main costs to consider:
- Court fees: In most states, there are court filing fees that must be paid to initiate the probate process. These fees can range from a few hundred to several thousand dollars.
- Executor fees: If you appoint an executor to handle your estate, they may be entitled to a fee for their services, which is typically a percentage of the estate value.
- Appraisal fees: If there are significant assets in the estate, such as real estate or artwork, an appraiser may be needed to determine their value. This can add several thousand dollars to the probate costs.
Schedule a Consultation with a Professional Estate Planning Attorney
Estate planning, while essential in many instances, can come at different price points depending on an individual’s needs. At Galanti & Copenhaver, we understand that the estate planning process can be overwhelming. Our experienced team is dedicated to providing an individualized and client-centered experience. Schedule a consultation with one of our team members today!