The Average Price to Create a Typical Estate Plan

While competency should be a prerequisite of your legal professional, your typical estate plan is ultimately just a commodity: a purchased product that should work when you need it. With this in mind, here are some thoughts when considering the creation of an estate plan:

HIRING A NON-ATTORNEY IS NOT A GOOD IDEA

Why? Because creating an estate plan is the practice of law, and only attorneys are authorized to engage in the practice of law. I am sure people will disagree, but this blog is not a forum for that kind of discussion.

USING DOCUMENT PREPARATION SERVICES IS ILL-ADVISED

Just like many legal matters, people can create their own estate plans without using an attorney. You just need to be reasonably comfortable that you have properly educated yourself on the subject. For example, as a car owner you may feel comfortable changing a headlight bulb or some other minor matter, but you will defer to a trained professional to handle engine repairs and other complex car maintenance. Likewise, an estate plan (particularly in complex situations such as subsequent marriages, blended families, or distribution restrictions) should be handled with an understanding not only of the documents individually, but also knowledge of how the whole estate plan process functions in light of the applicable circumstances.

WHAT IS PART OF A TYPICAL ESTATE PLAN?

Typical estate planning documents include:

-Last Will and Testament (with guardian nominations, as needed)

-Living Trust (aka living revocable trust, AB trust, AB QTIP trust, revocable living trust)

-Durable Power of Attorney for Health Care (with HIPAA authorizations recommended)

-General Power of Attorney (or springing version which is our recommended version)

-Assignment documentation (i.e. deeds, general assignment, entity interest transfers)

-Change of ownership actions with bank accounts, brokerage accounts, and other institutions

-Change of beneficiary documentation for life insurance and IRAs, as needed

-Other documentation depending on the circumstances.

(There are circumstances where persons do not need to create a living trust, but living trusts are the foundation of most estate plans and this blog presumes its use.)

WHAT IS A FAIR FEE FOR CREATING AN ESTATE PLAN?

It is fair to assume the cost to create an estate plan is pretty high on the list of questions. There is some insight on this subject from what I believe are honest attorneys who approach estate planning as we do, and provide commentary that $1,000-$4,000 is a fair and reasonable price. While true, we believe this is still a pretty broad range.

For your typical married-person estate plan, we believe $1,500-$1,900 is a fair price range in San Diego County, and for much of California. Estate planning for a married couple is slightly more expensive than for a single person due to the additional documentation for both spouses. In addition, most estate planning should be billed on a project--and not hourly--basis. The value of an estate plan is not created in the time it takes create, so an attorney should not bill hourly for this kind of legal work.

Estate planning costs are further largely unrelated to a client’s net worth, at least until a client’s net worth exceeds $5,000,000 (or $10,000,000 for married couples). And yes, I am using round numbers for those who know the exact amount of the unified tax credit equivalent.   As such, the cost to create an estate plan for a married couple with $1,000,000 in assets should be the same for a married couple with $5,000,000 in assets, all other things being equal.

CONCLUSION

While competently creating an estate plan is critical, it is also critical that your trust is properly created and funded in order for the benefits of the trust to function. Given our firm’s strong client base of business owners and property owners, our significant experience in handling the trust funding of investments, closely held businesses, and other business-related matters provides complete estate planning services—unlike some other estate planning firms. Creating your estate plan is important, and hopefully something you only have to do once. From a client's perspective, we completely appreciate that this process should also be done in a cost-effective manner while still competently providing a comprehensive plan for the future.

Dave Jarvis

Meghan DeSpain

Disclaimer: The information contained in this blog is for informational purposes only and does not constitute legal advice or create an attorney-client relationship. The opinions expressed in this blog are the opinions of the author only and may not reflect the opinions of the author’s law firm. No representations are made as to the accuracy, completeness, or validity of any information contained in this blog. For legal advice, contact an attorney at Goria, Weber & Jarvis or an attorney actively practicing in your jurisdiction. Do not send any confidential or privileged information to the blogger; neither Goria, Weber & Jarvis nor the blogger will assume any liability or responsibility for it. If you send any information, documents or materials to the blog, you give permission for the blogger to include them on or in the blog. No information, documents or materials you send to the blog can or will be considered confidential or privileged by Goria, Weber & Jarvis or its lawyers. Also, no such information, documents or materials will be returned to you.