19 May How Much Does Estate Planning Cost?
By: Barry E. Haimo, Esq.
May 19, 2015
How Much Does Estate Planning Cost?
BARRY HAIMO: Estate planning is not terribly expensive. It is relative to each person’s assets and their estate, their net worth. It also relates to the complicated nature of the type of work that is being done. But for most people, it’s very affordable.
“Estate planning” is a term used to describe the process of getting organized during life and preparing your estate (wealth and assets) for transfer after you pass away. Your estate is everything you will leave behind after you die—your home, your car, your bank accounts, etc., but it’s more than that. It also includes appointing the right fiduciaries to take care of you during life and carry out your wishes after you’re gone.
Estate planning can be relatively inexpensive. The cost will vary for each individual case, depending on how complex your situation is, the size of your estate, and many other factors. Compared to the cost of not planning your estate, estate planning is very reasonable.
We can only provide very loose guidelines to how much planning your estate will cost, but fairly basic estate planning usually costs between $750 and $1,500. More complicated estate plans can cost several thousand dollars.
If you plan on combining estate and business planning, the cost will be higher, as there are several additional documents and entities that must be created. Between $3,000 and $7,000 is a reasonable expectation for most business owners.
The Cost of Not Planning Your Estate
Failing to plan your estate can often be much more costly, especially in terms of time, hassle, emotional grief, and of course money—even for those leaving a modest value of assets behind. A strong estate plan will provide your next of kin with financial stability and security.
If you do not plan your estate, the state of Florida will decide how to distribute your assets. There is no guarantee that the assets will end up where you would like them to. Your friends and family will likely have to spend a long time in probate court to distribute your estate, which will become quite expensive and unpleasant for them.
Additionally, planning your estate minimizes the cost of taxes and expenses attached to distributing assets. Part of your estate can also cover the costs of end-of-life care, ensuring that your family will not be left with those expenses.
If you do not have any surviving immediate or extended family, your assets will automatically go to the state of Florida. Instead, you could choose to contribute your estate to the charity or organization of your choice.
What Factors Affect the Cost of Estate Planning?
In general, the more complex your estate, the more time your attorney will need to work on your plan—thus, the more your estate plan will ultimately cost.
Here are some of the factors that might affect the bottom line of your estate plan:
- The nature and type of assets you wish to leave behind. Typical assets, such as Florida homes, bank accounts, and physical property, are fairly easy to manage in estate planning. Atypical assets, such as businesses, out-of-state real estate, intellectual property, or benefits from another person’s trust, may require more time and expertise to manage.
- The value of your estate. Larger estates are subject to Federal Estate Tax, so they will require additional tax planning. They also are susceptible to increased liability, so your attorney will likely want to take extra time to ensure everything is done perfectly.
- Your family situation. Some estate transfers are fairly straight forward, like between spouses. Others can be more complex. For example, if you wanted to include several different children from multiple families, this would positively require additional planning.
No matter what size of estate you are leaving behind, you can benefit from consulting with a knowledgeable estate planning attorney.
Barry E. Haimo, Esq.
Strategic Planning With Purpose