How Much Does Estate Planning Cost?

Last Updated on May 10, 2024
Written by CPA Alec Pow | Content Reviewed by CFA Alexander Popinker

Estate planning involves arranging the management and disposal of a person’s assets during life and after death. Understanding the costs of estate planning is essential, as fees vary based on the complexity of one’s financial and personal situation. This article examines the factors that influence estate planning costs and provides guidance on budgeting for this important process.

How Much Does Estate Planning Cost?

Estate planning, on the lower end, can cost $100-$500 for basic online wills. At the higher end, customized plans for large estates with estates, businesses, and complex assets can exceed $100,000. The range depends on the size and complexity of the estate, types of assets, need for custom trusts and documents, and involvement of attorneys, financial advisors, and other professionals.

Here are typical cost ranges for estate planning:

• Basic estate plan (will, power of attorney, health care proxy): $500 – $3,000
• Intermediate estate plan (will, revocable trust, power of attorney, health care proxy): $3,000 – $10,000
• Complex estate plan (custom trust strategies, asset protection, advanced tax planning): $10,000 – $100,000+

The more customized the plan and greater the assets involved, the higher the costs go. But quality estate planning pays for itself by reducing taxes, probate costs, legal disputes, and unnecessary administrative expenses.

Here are typical costs for some of the main estate planning documents:

• Basic will – $300-$800
• Detailed customized will – $1,000-$5,000
• Revocable living trust – $1,200-$10,000
• Irrevocable life insurance trust – $2,500-$10,000
• Healthcare power of attorney – $200-$500
• Financial power of attorney – $300-$500
• Living will – $200-$500

More complex estates with extensive customization can cost tens of thousands. Online DIY wills are $99-$500 typically.

According to Nolo, experienced attorneys may charge $250 or $350 per hour to prepare more sophisticated estate plans. You could spend several thousand dollars to work with such an attorney.

McAndrews Law Firm has the following fees:

• Simple Wills (no trusts, no complex terms): $575 each (base fee)
• Codicils: $525 each (base fee)
• Pour Over Wills: $395 each (base fee)
• Testamentary Trusts: $350.00 each
• Credit Shelter Trust: $475.00 each
• Marital Trust: $175.00 – $400.00 each
• Pet Trust: $225.00 each
• Inter Vivos Trusts: $1,500.00
• Life Insurance Trust: $2,500.00 each
• Employer Identification Number (EIN): $195 each
• Complex Terms in any Will or Trust: $150.00 – $450.00 each
• Powers of Attorney/Living Wills: $350.00 each
• Living Will: $150.00 each
• Health Care POA with Living Will: $250.00 each
• Financial Powers of Attorney: $250.00 each
• Meeting with attorney to determine capacity: $250.00 (additional cost)
• Mental Health POA: $400.00 each

OC Elder Law notes that the cost of an estate plan can vary significantly based on factors such as the complexity of your assets, whether you hire an attorney or use DIY resources, and the specific documents you need. Costs can range from as low as $75 for simple documents like a Power of Attorney to $1,000 or more for more comprehensive plans.

At St. George Utah Attorneys the average cost ranges from $500 to $3,000, but can vary significantly based on the quality and number of assets.

Haven Life has a basic estate plan around $1,500, while more complex planning costs between $3,000 and $10,000.

What is Estate Planning?

Estate planning is the process of organizing and managing an individual’s financial affairs to maximize assets for themselves and beneficiaries. It involves coordinating legal, financial, and tax strategies related to:

• Wills and trusts
• Powers of attorney
• Healthcare directives
• Asset distribution
• Tax minimization
• Probate avoidance

The goal is to protect assets and ensure they are transferred according to the estate owner’s wishes as efficiently as possible.

The Estate Planning Process

The estate planning process typically involves:

• Initial consultation to assess goals and needs
• Evaluating assets and financial documents
• Drafting required legal documents like wills and trusts
• Reviewing tax implications and strategies
• Selecting executors, trustees, and beneficiaries
• Finalizing and executing the estate plan
• Periodic reviews and updates as needed

Careful attention at each step leads to an effective plan.

Goals of Estate Planning

Well-designed estate plans aim to accomplish several goals:

• Asset protection – Shielding assets from creditors, divorce, lawsuits, and market losses
• Wealth transfer – Passing assets to chosen beneficiaries while minimizing taxes
• Healthcare preferences – Specifying medical decisions and caretakers if incapacitated
• Probate avoidance – Transferring assets directly to heirs without court intervention
• Legacy planning – Supporting charitable causes and passing values to heirs

Factors That Determine Estate Planning Costs

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Several factors influence the costs of estate planning:

• Size and complexity of the estate – More assets mean more time and expertise needed for planning. Complex assets like businesses drive up costs.
• Types of documents needed – Simple wills are cheaper than intricate trusts. Healthcare directives and powers of attorney add costs.
• Involvement of professionals – Attorney and financial advisor fees make up a significant portion of costs.
• Customization level – Unique estate situations or specifications require greater effort and costs.
• Location – Estate planning costs more in major metropolitan areas.
• Use of DIY options – Self-guided online tools cost less but provide less personalization.

Selecting the Right Attorney

A cost factor is the attorney’s fees for developing the estate plan. Considerations when selecting an attorney include:

• Expertise in estate law – Ideally 10+ years focused on estate planning.
• Membership in estate attorney associations – Reflects specialized skills and continuing education.
• Fee structure – Flat fee vs hourly billing; predictability of total costs.
• Comfort level – Ensure good rapport and aligned estate planning philosophies.

Asking questions upfront ensures you choose the right partner for your needs and budget.

Estimating Attorney Fees

Estate planning attorney fees often range:

• $200-$500 per hour for senior partners
• $150-$300 for junior associates
• $2,000-$8,000 flat rate for basic estate plan
• $10,000-$100,000+ for complex estate planning

Get a detailed cost estimate before proceeding.

Role of Financial Advisors

In addition to attorneys, financial advisors, and accountants play a role in aspects of estate planning:

• Wealth transfer strategies – Strategies to pass assets tax-efficiently to heirs.
• Asset valuation assistance – Help determining fair market value of complex assets.
• Tax planning – Recommendations to reduce estate taxes.
• Trust fund management – Administration of any trust assets or distributions.

Their expertise comes at an additional cost but provides significant value.

Financial Advisor Fees

Some typical financial advisor fees for estate planning assistance:

• $150-$500 per hour
• 0.50%-1.25% of assets under management if ongoing management desired
• Flat project fees starting around $1,500

Importance of Ongoing Financial Planning

Estate planning should be part of a lifelong financial strategy, not a one-time transaction. Some important aspects surrounding estate planning include:

• Wealth building – Growing assets to eventually transfer to heirs.
• Retirement planning – Ensuring your own finances are secure.
• Asset protection – Shielding your estate from creditors and lawsuits.
• Risk management – Mitigating financial risks with insurance planning.
• Charitable giving – Incorporating charitable donations into your legacy.

Ongoing reviews and updates to the estate plan are recommended as well.

Tax Considerations and Planning Opportunities

Taxes play a major role in shaping an estate plan. Taxes to consider include:

• Estate tax – Federal tax on asset transfers above the estate tax exemption threshold. An estate planning attorney can recommend strategies to minimize this tax liability.
• Inheritance tax – Levied by some states on beneficiaries who receive estate assets. Differs from estate tax.
• Gift tax – Federal tax on large gifts above the annual gift tax exclusion.
• Capital gains tax – Assets transferred to heirs receive a stepped-up cost basis, avoiding this tax on sale.
• Income tax -Income generated by assets in your estate or certain trusts may create income tax liabilities.

Proper planning helps minimize taxes that could erode your legacy.

Using Trusts in Estate Planning

Trusts are a common estate planning tool to achieve goals like tax minimization and probate avoidance. Different types come with varying costs:

• Revocable living trusts – Avoid probate and provide control during life at a cost of $1,200-$10,000.
• Irrevocable trusts – Remove assets from your estate with starting costs of $2,500. More complex irrevocable trusts are $10,000+.
• Testamentary trusts – Created in a will to distribute inheritances over time. Cost included in overall will.
• Special needs trusts – Provide asset protection for beneficiaries with disabilities without affecting eligibility for government benefits. Typically, $2,000-$5,000 to establish.

Trusts require customized drafting and ongoing administration, but provide significant benefits.

Legal and Ethical Considerations

While striving to minimize taxes and administrative costs, estate planning must adhere to legal and ethical guidelines:

• Family disputes – Conflicts over inheritance distribution or probate can result in expensive litigation. Using clear language in estate documents helps avoid this.
• Undue influence – Unethical financial advisors, family members, or others exerting excessive pressure on estate planning decisions. Say no to unwanted recommendations.
• Transparency – Sharing estate planning with heirs, trustees, and executors helps align expectations and avoid unpleasant surprises later. But testamentary privacy is also an option.

An ethical, communicative estate planning process aligned with the law avoids many potential issues and costs down the road.

DIY Estate Planning Options

For those with simple estates, DIY estate planning software or online legal platforms provide a lower cost alternative:

• Basic DIY online will – $99-$500
• DIY living trust documentation packages – $199-$500
• Online legal platforms like LegalZoom – DIY wills for $179

While cheaper, DIY options lack the customization and expert guidance provided by attorneys. But they offer an accessible starting point.

The Importance of Shopping Around

The costs of estate planning can vary widely based on the professionals you engage. Always get multiple quotes before proceeding:

• Consult 3-4 estate planning attorneys to compare costs for your specifics needs. Ask for flat fee options.
• Get fee-only financial advisors to bid on asset appraisal, tax strategy, and advisory scope.
• Compare online DIY costs versus legal fees to gauge potential savings.

Final Words

Estate planning costs depend on the size and complexity of one’s financial life and desired legacy.

These expenses primarily encompass professional fees for the creation of essential documents such as wills, trusts, and directives, alongside considerations for tax planning, asset management, and holistic financial strategies.

Frequently Asked Questions

What is an estate plan?

An estate plan is the comprehensive arrangement for managing and distributing a person’s financial assets and property during their lifetime and after death. It involves coordinating wills, trusts, powers of attorney, healthcare directives, beneficiary designations, and other legal documents to transfer assets per the estate owner’s wishes while minimizing taxes, probate, disputes, and administrative costs.

Who should have an estate plan?

Anyone over age 18 with financial assets, real estate, or dependents should implement some level of estate planning. The larger and more complex your assets, the more value estate planning provides by avoiding potential complications like probate disputes or unintended distributions. It provides control, protection, and peace of mind for you and your heirs.

What is a will?

A will is a legal document that communicates how a person’s probate property and assets should be distributed after their death. It identifies beneficiaries for assets that were owned in the deceased’s individual name. Wills also typically name an executor to oversee the probate process and a guardian for any minor children left behind.

What is a trust?

A trust is a legal entity used to hold assets and align with estate planning goals like minimizing taxes, avoiding probate, and setting up inheritance distribution schedules. A trust document names a trustee to manage assets on behalf of beneficiaries per the trust’s guidelines. Trust assets avoid probate. Different types of trusts include revocable living trusts, irrevocable trusts, and testamentary trusts.