The Cost of Estate Planning

Why does estate planning cost so much?

Let me answer a question with a question.

Does it?

Estate planning is an investment in you and your family. Estate planning is not about you, it is about them.  Planning is an investment in love designed to protect your spouse, children, and other loved ones.

Estate planning is a financial investment. Where else can you invest a dollar and get back $2, $3, or more? A plan on $300,000 estate (not uncommon) is $2,500. Probate and other expenses on that estate are about $18,000. You put in a $1 and your family pulled out $7.20. That is a 720% return on investment.

If you could empower yourself to protect your children, yourself, your family, and your property against the rigors and unforgiving nature of the courts and law for less than the cost of a convenience store cup of coffee a day, would you pay that much? What about financial predators? Creditors?

Joe bought $1.85 mediocre coffee every day at the convenience store. Instead he started taking a cup of good coffee from home and started putting that money in a jar. At the end of a year he had $481.00 stuck in the jar. (Imagine if that was a $3.00 Starbucks cup of coffee. That would be $780.00 in a year).

That’s right. For less than the cost of a lousy cup of coffee, you can protect your children, yourself, your family, and your property.

For that measly amount, you are getting a well thought out, custom, individualized plan, not a “box” plan from the office supply store or online. You can get legal advice, not just a form to fill out.

There is something to the saying “you get what you pay for.” Lisa did an online will but did not get part of it notarized. This could have caused a big problem later if it was not caught during other work being done by an estate planning attorney. The overall cost would have been much greater than having a custom plan done.

The overall cost includes not only the attorney’s time, but training, assistants, witnesses, drafting, proof reading, and overhead of the building.

This does not include transferring assets to any trust(s) created. Excess asset transfers will add to the base price. If you don’t transfer your assets, then any trust created is worthless.

Any Supplemental Needs Trusts will add to the price.

If the attorney has to go to your location, then travel time at the hourly rate will typically be added.

Breaking this down by a minimum every 5 year review, you are looking at $1.21 per day. That is less than the cost of a cup of cruddy convenience store coffee every day.

Finally, don’t expect bargain prices if you just need a single document. An attorney, like a CPA or doctor’s office, has an overhead to open the file, make notes, do the work, and close the file.

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Three Facts You Wouldn’t Believe About Estate Planning Law

1. When you leave your assets to your children are you confident that they will be divided according with your wishes and the state won’t try to interfere? If you don’t create your estate plan, the State of Arkansas has created a plan for you.  It is in Title 28 and is well defined.  Without a plan, your spouse gets 1/3^rd and your children split the other 2/3^rds of everything but real estate.  For real estate, your children split the total subject to your spouse’s 1/3^rd life estate.

2. The State can rip your rights away and give them to a complete stranger with a guardianship. In the case you are endangering yourself, Adult Protective Services can ask a judge to become your guardian.  You can prevent this with a Durable Power of Attorney.

3. Wills don’t provide any protection for you.  A Last Will and Testament is simply a list of gifts and instructions for others.  If you want your assets and rights protected for yourself, you need to have more than a Last Will and Testament.

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6 Excellent Estate Planning Tips to Get Your Affairs in Order

Sooner or later everybody is going to need an estate plan.  The only questions you should be asking is “when?” and “who wrote the plan, you or the government?”

No matter how much you own, you should have your affairs in order.  You want to give what you have, to who you want, how you want, and in a timely manner.  Your family will appreciate the fact that you took the time to get your financial, legal, and personal houses in order.

You want to save your loved ones and spouse from going through the emotional ordeal and financial expense of court proceedings. Get your financial house in order.

If something should happen suddenly, the people left behind can be in a lot of trouble.  Don’t ever think you are too young to get your house in order.

Make Sure You Know Who Gets What

You need to make sure that you determine who gets what.  The quickest, cheapest, and easiest way is through a Last Will and Testament.  However, that may not always be the most efficient way.

If you don’t determine ahead of time who gets what, the government has already decided who gets what, how much, and how long they must wait.  Typically, your spouse and children are first.  But, if you don’t have any close relatives, what you have may end up going to the government.

Be very clear on who gets what.  This is one time when you don’t get a second chance to decide.

Decide How Your Money Will Be Spent

You can go beyond who gets what, and decide when and how the money will be spent.

By setting money aside and putting conditions on having the money, you can maintain control for many years to come.

Match Your Plan to Your Stage in Life

Everybody has a different and unique situation.  Everybody needs a unique and different plan to match their situation.

You plan will be different before children, with young children, with teen children, after your children are out of the house, when you retire, and when and if your health declines.  Each stage of life needs an updated plan.

Many people think it’s foolish to setup a plan, only to recreate it just a few years later.  Nothing is further from the truth.  The more foolish move is to do nothing.

Do All You Can to Protect You and Your Money

You should use every tool you have at your disposal to protect yourself, your family, and your money.

Wills, trusts, powers of attorney, healthcare powers of attorney, HIPAA waivers, and living wills (advance directives) are the basic tools available.  However, your attorney may know of tools specific to your state that can be used to create an even better plan.

Study the tools available to you, pay attention to an estate planning expert attorney, and use the tools to protect everybody and everything you can.

Plan to Minimize Taxes

Just because you can have up to about 5.5 million dollars before estate tax kicks in, doesn’t mean that you shouldn’t plan for it.  Congress can change, and has radically changed, that limit many times.  One year it was a few hundred thousand.

The estate tax rate starts at 40%.  You shouldn’t be caught in a plan that did nothing to plan for taxes, just to find that the limit has been changed downwards and now your family owes a large amount in taxes.

Insurance to Cover Costs

You can use term or permanent insurance to cover your final expenses and costs.  You should strongly consider either pre-arrangement insurance or pre-paying your final costs.

Otherwise, your estate can be asked to pay off your final debts and expenses, reducing what your family will get in the end.

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What does an estate planning attorney really do?

I help you avoid the regret of putting you family through the system…

From time to time I stop to think about what I really do for a living.  Each time, I dig deeper than the time before and come up with a new answer…

The first answer I came up with, and it is still a good one, is to protect people and pass their assets to the next generation.

The next level of answer is when you consider the emotional impact of not having an estate plan…

An estate planning attorney stops your spouse or family from wasting their time better spent doing other things going through the emotional rigors and financial expense of court proceedings in order to:

• Pass your belongings to the next generation when you want, how you want, and to whom you want, not the Government
• Take control of and manage your assets when you can’t
• Make informed, compassionate medical decisions per your wishes, not the Government
• Have a dignified end of life experience
• Make financial and legal decisions per your wishes without Government involvement

In short, I help you avoid the regret of putting you family through the system.

 

 

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Why Estate Planning?

Estate planning is an investment in you and your family. Estate planning is not about you, it is about them.  Planning is an investment in love designed to protect your spouse, children, and other loved ones.

Estate planning is a financial investment. Where else can you invest a dollar and get back $2, $3, or more? A plan on $300,000 estate (not uncommon) is $2,500. Probate and other expenses on that estate are about $18,000. You put in a $1 and your family pulled out $7.20. That is a 720% return on investment.

You protect family members who depend on you. If something happened to you, could your family continue to live in the same home? Would they have enough to pay for food? You help maintain their lifestyle.

Plan for the unexpected. You prepare for unexpected illness or injury. If you were to become very sick, keep your family on solid footing. Cover bills and other financial responsibilities.

You need planning because you want to protect your spouse and children from enduring the emotional roller coaster and expense of

• Getting a guardianship ($$$$)  in court so they can care for your health and finances
• The emotional torment and financial strain of probate
• Losing their inheritance in a divorce
• Being preyed on by a financial predator

You want planning to ensure your spouse and children never endure:

• The expense and emotional torment of probate
• Guardianship proceedings and cost ($$$$)
• Losing their inheritance in a divorce
• Paying for your long term care because of the never-ending ever-increasing costs of care
• Fending off financial predators

The main reasons people give, when asked, for estate planning are to

• Avoid family chaos and discord. Set and meet expectations of the family so there is no misunderstanding.
• Avoid probate.
• Protect children from mismanaging their inheritance, and estate taxes.
• Distribute assets in a timely manner instead of waiting on the courts.
• Make sure your wishes are carried out if you cannot make decisions.
• It is you last teachable moment.
• Blended families.

If you have minor children, you should nominate guardians in case both parents don’t make it until the children are adults. If you don’t name a guardian, a judge will make the decision without your input.

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What Is Estate Planning?

Most people think of estate planning as just deciding who gets what when.  But, planning is much more than just deciding who gets what.

Planning is as much about protecting your rights, your family, and your assets during your lifetime as it is about making final gifts.

Estate planning is about protecting your fundamental rights.  Your right to make your legal, financial, personal, and healthcare decisions your way.

Planning is deciding now what will happen tomorrow.  You may not be able to predict tomorrow’s circumstances, but you can choose now who will be there for you and how your decisions will be made.

An estate plan is about protecting your dignity and your right to make choices.  It is also about deciding who gets what and when instead of letting the state make those choices.

If you do not make your complete estate plan, you are putting yourself in a position where your basic, fundamental liberties you now enjoy can be taken away by complete strangers.  Those strangers will ultimately have control of your choices, decisions, rights, and assets.

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