Estate Planning Costs
My wife and I hired the same estate planning attorney twice. I didn’t follow my own rule of asking the price ahead of his service. Oh Boy, was I surprised? Estate planning costs are expensive!
Estate planning costs tend to range from a few hundred dollars to several thousand.
Estate Planning Questions to Ask Yourself When Hiring an Attorney
1. Trusts Are Basic for Most People
If you have kids, you should immediately establish a trust to protect them. For most average American, a Trust does not need to be complicated or extremely expensive. You should not be shy about reminding the estate planner you want a basic Trust and try negotiating a better flat fee or a revision in the future. Revisions can include new assets or a business, newborn child, or change of beneficiaries or guardians.
2. Ask Family & Friends for Referrals
After we received the outlandish bill for revising our Trust, I started calling friends and family for comparable pricing. I was shocked to hear I was billed well over twice comparable work. One friend used an estate planning firm that charges a flat fee and has unlimited revisions in the future. It was even more surprising that his quote was well under the price I paid for the original setup and now my revisions.
3. Ask for an Initial Meeting
Most estate planning lawyers will not charge for the initial meeting. It’s not a universal policy and may prefer the initial consultation by phone. The time they spend with you reduces the time they can devote billing someone else for work.
4. Check Out the Attorney’s Office
In hindsight, I should have known I was overpaying. When I dropped the check off at their office, they had a beautiful view of the Chicago skyline in an expensive building on a costly street. My accountant, on the other hand, has a very basic office with the bare necessities on the second floor of a boring strip mall. They are wonderful, and my annual bill is exceptionally reasonable.
5. Be Prepared Ahead of the First Meeting
To save time and money, be prepared ahead of your first meeting. Create a balance sheet of all your assets and potential assets you expect within the next few years. Discuss with your significant other the beneficiaries, who will manage your minor’s assets, charities, life choices if you are incapacitated, and other related questions. Be organized ahead of your first meeting. The attorney’s time is your money. If the attorney sees you are disorganized and time-consuming, it will cost more for planning.
6. Always Ask for a Flat Fee
Since initially drafting the documents, we’ve had two guardians for my kids pass-away and also our affiliation with some charities changed over time. Also, we wanted our trust to prevent our kids from getting money too early. No one ever knows what their child will be like in their 20’s, so I’d rather delay any inheritance.
These were all relatively minor changes to our original trust.
We decided to use the same estate planner since he was familiar with our wishes and the creator of the original estate documents.
What seemed like minimal work to me was deemed to be a lot of work for the attorney. Once complete, we received a bill for about double what originally cost to create a trust, a living trust, and put our house in the trust. When I questioned the attorney, he said I essentially made the mistake of not asking for a flat fee while he instead charged me per hour for the revisions. I was speechless given he was an acquaintance and it was considerably less work than the original drafting.
Don’t make my mistake. Always ask the estate planning costs ahead of time. Ask the estate lawyer for a flat fee vs. an hourly fee. An estate attorney cost per hour can range from $150 to $600 per hour depending on location.
7. Comparing Estate Planning Attorneys
After getting my second bill, I started calling more friends and got more references. I was amazed some attorneys will not only charge you a flat rate but offer either limited or unlimited revisions in your lifetime. In hindsight, I would hire an estate attorney who does unlimited revisions as my wishes and assets change over my lifetime.