How to Save Money on Estate Planning

Here's how average Americans can save money on estate plans and related attorney fees.

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Many people assume that estate planning is just for the wealthy. While it's true that estate planning for millionaires is critical, everyone needs an estate plan — no matter how little money they might have. The good news is that you don't have to spend a lot to put an estate plan in place. Here are the basics of what's in an estate plan and how to save money on each step.

What's in an estate plan? 

An estate plan sets out your wishes, both financial and healthcare-related, for those left behind or those making decisions on your behalf. Moreover, estate plans can save your heirs time and money by avoiding probate (a legal review of your documents). In general, here are the most important documents you should have in your estate plan

  • Will. This document designates your heirs and states who will receive what among your assets and possessions. 
  • Durable powers of attorney. These documents include a durable healthcare power of attorney (POA) and a durable financial power of attorney, both of which kick in when you can no longer make decisions for yourself. These documents become invalid after your death.
  • Advance Healthcare Directive (often with a Living Will). This document gives orders regarding what kind of medical treatment you want if you are incapacitated or for your end-of-life care. It may include other documents like a do-not-resuscitate (DNR) order. You decide how much or how little intervention you want to receive, including whether you want to remain on life support. Every adult should have an advance directive.
  • Executor's Certificate or letters testamentary. This document designates the person who has the legal authority to act on behalf of your estate after you die. If you don't choose someone to act on behalf of your estate, the probate court will. Many people choose a family member, close friend, or a professional like an attorney or accountant.
  • Trust. Setting up a trust makes it easy to pass your assets directly onto your heirs, bypassing the probate court

The average cost of an estate plan in the U.S. varies widely, depending on how many and which of the documents listed above are included. Broadly, you can expect to pay between $1,200 and $4,000 if you go to an attorney and have them draw up the documents. 

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An estate plan that includes a revocable living trust and all of the end-of-life documents listed above can run you $1,500 to $3,000, while those with businesses could pay $4,000, $5,000, or even more, depending on the complexity and extent of their business.

You may pay as little as $150 to $200 for just a basic will and power of attorney.

When estimating the cost of an estate plan, consider whether a prospective attorney offers a flat rate or requires an hourly rate. Flat-fee plans typically include the most common documents such as a basic will, financial, property, and healthcare powers of attorney, a living will, and guardianship appointments for those with minor children.

If your estate plan doesn’t fit into a simple category, you will likely get into per-hour rates, which can run between $200 and $500 (and up), depending on the area you live in. Fees tend to be higher in large metropolitan areas. Hourly rates also typically require a retainer; usually the hourly rate they charge times the number of hours they expect to work.  

Saving money on an estate lawyer 

Do some legal legwork. While an estate plan may seem like a lot of documents, having a list is an excellent way to start the estate-planning process, especially for those on a budget. However, you don't have to be wealthy to afford all these documents. You just need to know where to trim the amount of time your estate lawyer is billing for.

Piggyback on other professionals. If you're already receiving other services from an accountant or financial advisor, you can also ask them questions that may pertain to estate plans. They should be able to help you establish a foundation for an estate plan so that you can go to an attorney with your documents as prepared in advance as possible.

Understand attorney fees and qualifications. Make sure you're getting your money's worth. You don't want just any lawyer to draft or review your documents, but someone with special training and certification. You can find a local estate attorney using an online directory, such as the American College of Trust and Estate Counsel (ACTEC), Justia or Legal Match. Ensure you understand how you will be charged. And try to negotiate a free, first-time consultation.

Use templates (carefully). If you feel comfortable doing so, you may draw up your own documents. Sites like LegalZoom and RocketLawyer provide templates you can fill in. While using online guides might be a good option for those with a basic understanding of their needs and wants (and the ability to write), it's still an excellent idea to have an estate lawyer review them to ensure everything is in order, legal and binding. 

Using software or an online service to save 

Do-it-yourself (DYI) websites might seem like the most obvious way to save money on estate planning, but you need to proceed with caution. You may wind up paying more if you fail to have the documents properly executed or if the will is contested.

Estate-planning software like Nolo’s WillMaker & Trust will typically cost between $100 and $400, depending on the number of documents included. However, you may pay as little as $40 for just a basic will or as much as $700 for a more complete and complex estate plan using DIY software. Be sure to review the list of included documents before making a purchase. Online services like Trust&Will also offer flat rates depending on the number of documents in your selected package. 

Services or software like these can save you hundreds or even thousands of dollars. However, it may only be worth using them if you know exactly which documents you require. Buying a package that doesn’t include everything you need will result in an added expense that could approach the cost of an attorney’s basic flat fee as listed above.

You should always consult a lawyer for complex family situations involving children from a previous marriage, children with special needs, family businesses or other such cases.

The bottom line 

Once your plan is in place and executed, you may be tempted to think of it as done and dusted. Instead, it's a good idea to review your estate plan every three to five years, updating your beneficiaries and heirs so that your wishes will be honored at the end of your life. Keep passwords and account information in a place where family members can access them, and make sure they have copies of the pertinent paperwork, especially anything that applies to them.

No matter how much money you have, you must have an estate plan. You probably have more assets than you realize, but you do not have to spend indiscriminately on attorney fees to establish your estate plan.

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Jacob Wolinsky

Jacob is the founder and CEO of ValueWalk. What started as a hobby 10 years ago turned into a well-known financial media empire focusing in particular on simplifying the opaque world of the hedge fund world. Before doing ValueWalk full time, Jacob worked as an equity analyst specializing in mid and small-cap stocks. Jacob also worked in business development for hedge funds. He lives with his wife and five children in New Jersey. Full Disclosure: Jacob only invests in broad-based ETFs and mutual funds to avoid any conflict of interest.