- Carol Highfill
How Much Should a Will and Trust Cost?
Planning how your assets will be managed and distributed after death is a daunting task for many and the fee involved can often discourage people from estate planning. Many people are not aware of whether a will or a trust would be the most appropriate or cost-effective way to care for their assets.
A good starting point is to figure out which option would cater to your individual needs.
What is a Will?
A will is a legal document that will only take effect after death and it is also referred to as a testamentary document.
Having a will in place means that it is easy to see who and how your assets will be distributed after death. Another purpose of a will is to identify who will be the executor of the will – this is the person who will need to handle any administration which needs to be completed after death. For example, if you had a property that needs to be sold, this is an administrative matter which the executor of the will would handle.
There are certain requirements that must be carried out in order for a will to be a valid legal document. The will must be 1) in writing, 2) signed by the testator and 3) witnessed by two people.
This document must then be submitted to probate as the court will need to issue an order to find the will valid following the Probate code.
What is a Trust?
A trust is a legal arrangement where someone (known as the trustee) can hold another person’s property (known as the settlor) for the benefit of someone else (the beneficiary) and it can have specific conditions attached to it.
Unlike a will where it only comes into effect after death, a trust may also be established during your lifetime and this is known as a living trust. Where a living trust is created, it is likely that you will be the trustee, settlor, and beneficiary until you die or if you were to become incapacitated.
There is no requirement for a trust to be submitted to probate in order to be valid and this can be an important advantage of getting a trust in place over a will, where the circumstances are right. Not only is this less time-consuming, but it also avoids costly proceedings.
Estate planning is an important process for every individual to ensure assets are managed. A basic estate plan will typically include the following documents: wills, powers of attorney, medical powers of attorney and medical directives.
Generally, trusts are not included in basic estate plans as they do not apply to every persons’ situation. There are different methods of estate planning and an important decision is whether you wish to seek an attorney or do it yourself, which can impact the price.
Do It Yourself
As every individual has completely different needs and assets, it can be difficult to determine whether to do estate planning yourself or to seek an attorney.
Unfortunately, there is no one size fits all and it is not always advisable to do it yourself especially where your estate is complex. Where your estate is large or complex, it would make more sense to seek an attorney, especially where the estate is larger than $11.4 million, as this will involve federal taxes.
A basic estate planning kit can be bought online for as low as $100, but it can be time-consuming as you will need to research how to carry this outright to avoid additional costs should it be filled out incorrectly.
This is somewhere an attorney would be helpful as they can provide additional advice. However, where your estate is straight-forward, doing it yourself would save money, as a typical attorney in California can charge anywhere from $800 to $3000 dependent on the circumstances.
Factors Affecting the Cost
There are various factors which may increase the price of your estate planning. These can include any of the following;
The size of your estate – the larger the estate, the more likely the cost will be higher.
The types of assets that you own
Your personal wishes for how your estate should be transferred
Your location - if you want an attorney, it can be far more expensive to hire one in urban areas than more rural locations.
The complexity of your circumstances – if the situation is more complex, it will need additional time and knowledge to arrange.
If any specialist advice is required – this could mean you need a specialist attorney to consider the issues which can be costly.
If you decide to get a living trust in place and you want to get an attorney, it would be best to seek one who specializes in trusts, as estate planning may only cover wills and probates.
Be cautious of websites or companies that seek to sell expensive estate planning tools that are not necessary.
Probate is a particularly expensive process in California and it is important to consider the advantages and disadvantages of getting a trust versus getting a will.
Attorneys who do specialize in estate planning are likely to be more expensive and most appropriate for complex circumstances.
If you wished to do this process without an attorney, you may wish to pay one an hourly rate to get them to check the documents to avoid any mistakes and potential further costs.
The Superior Court of California recommends getting a ‘pour-over will’ along with any living trusts to ensure any property not included in the trust is cared for.
Do plenty of research to avoid unnecessary costs later down the line!
Estate planning is not only appropriate for the rich or those who are elderly but for every individual to ensure that there is a clear plan for how their assets will be managed. Although it can be a costly process, by ensuring that you have researched which options would best suit your personal circumstances, you can avoid further costs later down the line.
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