How Much Estate Planning Costs

Estate planning, while seemingly not an imminent task to focus on, is one of the most critical aspects of your finances. A clear estate plan helps you communicate your wishes and ensure your property and assets go where you want them. However, building a proper plan requires hiring a professional (or even several), whose valuable time and experience can come at a cost.

In this article, we’ll break down the costs associated with estate planning. We’ll also outline the factors that influence these costs, when it might make sense to take a do-it-yourself (DIY) approach versus hiring a professional, and how to find the right estate planner for your needs. Additionally, you’ll gain valuable insights from industry experts on the overall costs and the value of working with a professional.

Breakdown of Estate Planning Costs

The fees for estate planning depend largely on the services you need and the professional(s) you hire. Often, planning an estate involves several elements, including drafting a will, establishing trusts, and creating advance healthcare directives, among others. Additionally, an expert may charge fees for their time or per project.

Here is an outline of what a typical estate plan may include, including costs for professionals:

• Wills. Drafting a simple will typically ranges from $300 to $1,000, depending on your assets.
• Trusts. Establishing a trust can cost at least $2,000, but potentially more. The exact amount depends on the size and complexity of your estate.
• Powers of attorney and advance healthcare directives. Setting this document up can cost about $100 to $500.
• Estate planning attorney. Fees can vary, but professionals typically charge between $200 to $550 per hour.
• Financial advisor. An advisor can assist with managing trusts and factoring your estate into a larger financial plan. Fees vary, with some charging a flat rate and others a percentage of assets under management (AUM).

How Fee Structures Work

An estate planning attorney may charge clients in various ways, including flat and hourly rates or contingency fees. The structure you choose impacts how you pay for services and what kind of access you’ll have to the professional for ongoing estate planning needs.

Hourly

In an hourly arrangement, an estate planning professional will charge you per hour for the services you require. Whether it’s drafting a will or a simple consultation, this fee structure can apply. Typically, a legal professional may charge anywhere from $200 to $550 per hour, depending on their expertise and locale.

Flat Fee

A flat fee is when an estate planning attorney charges you a fixed cost for their services. This is typical when hiring a professional for a specific task or service, such as drafting documents. For example, an expert might charge you $400 to draft a standard will.

Contingency Fee

In a contingency setup, an attorney receives a percentage of the estate if they successfully litigate claims. This structure typically applies in probate situations after someone passes away rather than during proactive estate planning.

Factors That Influence Estate Planning Costs

The total cost of estate planning, for the most part, is rarely uniform. Instead, it varies depending on several factors, including the size and complexity of an estate, your location, and the specific services you require. Before identifying a professional, it’s helpful to go into the process fully aware of how your circumstances can impact what you’ll pay.

Size and Complexity of Estate

One of the significant factors influencing estate planning costs is your estate’s overall complexity. The total value of your assets, the number of beneficiaries, and your specific wishes all play a role. Large or intricate estates—such as those involving multiple properties, business interests, or unique assets—may require not just an attorney but also financial advisors and tax professionals, which can significantly increase costs.

Location

Where you live can also affect estate planning costs. Professionals in major metropolitan areas typically charge more than those in rural regions. Additionally, estate planning laws vary by state, influencing the services needed and the associated fees.

Services Required

The more you need or want to accomplish, the higher your costs may be. Establishing trusts, assigning guardianship, or implementing charitable giving strategies often require specialized expertise, which can increase fees. Additionally, updating your documents over time due to major life events—such as marriage, divorce, or selling a business—can lead to ongoing costs.

Do You Need to Pay for Estate Planning?

Because estate planning costs can be steep, you may wonder whether you can take on a do-it-yourself (DIY) approach. This may be especially enticing if you have simple needs and a legal or financial background. But is it right for you?

“Understanding the different costs and deciding whether a DIY estate plan is a viable option is up to the individual and their circumstances,” explains Howard Enders, COO at The Estate Registry. While this is true, Enders cautions that “mistakes in an estate plan can result in more risks and expenses, such as facing probate or unwanted tax implications after a loved one passes.” It’s also “too late to change anything” if you do make mistakes, warns Kelsey Simasko, attorney at Simasko Law in Mount Clements, Michigan.

In other words, DIY estate planning can have lasting and potentially irreversible consequences after you pass away if you don’t do it correctly. For this reason, it’s likely not the best option for most people, even if it saves money in the short term.

How to Pay Less for Estate Planning

Estate planning, while essential, can be expensive. However, there are strategies you can use to save as much as you can as you seek out a professional. Here are a few options to consider:

• Comparing options. Be sure to shop around to find the estate planning attorney with whose price and demeanor you feel most comfortable with. Pay extra attention to fee structures, services offered, and the credentials of the professional you’re considering.
• Use online tools. Digital estate planning tools can help you prepare documents without dealing with hefty attorney fees.
• Do your homework. Before planning your estate, take some time to gain background knowledge on the subject. This will allow you to ask the right questions and have a meaningful conversation with a professional, which could save you time and money.
• Be clear about what you want. Go into your first appointment with an understanding and expectation of what services you want and your wishes for your estate. Doing so can save you and your attorney time, effort, and money.

Frequently Asked Questions

How much does it cost to draft a will?

Drafting a will can cost anywhere between $300 to $1,000. The exact cost depends on the experience, expertise, and location of the professional, as well as the complexity of your estate.

Is estate planning worth paying for?

Paying for estate planning services ensures you’re properly structuring your estate. By doing so, your wishes are more likely to be carried out. Conversely, not having a plan or attempting a DIY approach could cause the opposite, potentially imposing legal and financial strife on your grieving loved ones.

Do estate planners charge hourly or flat fees?

An estate planner may charge using either fee structure, depending on the services you need. Flat fees are ideal for one-off tasks, such as drafting a will or assigning power of attorney. An hourly arrangement may be necessary if you need time to discuss your estate plan or have complex needs.

How often should an estate plan be updated, and what are the costs associated with making changes over time?

“As time passes, updating your estate plan consistently is essential,” says Enders. If you must revise your plan or documents, your estate planning attorney will likely use the already agreed upon fee structure, whether it be hourly or a flat fee.