Estate Planning

formerlyGDaisy09 · March 2016

H and I are planning to meet with a lawyer to set-up our wills. I got in touch with a lawyer I know, she said most people with young kids set-up wills, a joint trust, health directives, and powers of attorney, she said with her firm all those things generally cost somewhere from $2,000 to $3,000.

I already have an advanced directive and health proxy in place (H doesn't but he has the paperwork and has thought about it). If any of you have these things in place, what do you have? do these rates seem reasonable? I have absolutely nothing to go on here.

short+sassy · March 2016

Ouch!!! Ah! I need to do some similar things but was guessing it would be about half that cost.

However, my guess is based on nothing, so I am also curious to see the responses.

brij2006 · March 2016

We have all of those. We also have an additional trust set up within our will because FIL is horrible with money and we will be leaving a substantial amount, so his portion has a lot of requirements he has to meet in order to receive it.

We live in a LCOL area, but ours was $700 to set up.

smerka · March 2016

We did all that except the trust and it was $500. But it was kind of sloppy. We really need to do a trust because my kids would go to a friend and the money to my brother to handle for the kids. I'd like to have our money wishes spelled out.

jessica490 · March 2016

I believe we have all those things except for the kid part and set them up for $500. We used the same attorney we've been using for our condo/house closings.

formerlyGDaisy09 · March 2016

I was thinking that cost sounded high, but again my assumptions going in were based on nothing.

we'd been thinking about going with this firm because it's a larger firm that I'd expect to be around for a long time (even if the associates there might change). however now we're considering relocating, so I feel less of a need to do our business somewhere where we can build a history with them...one of those everything changes when you become a parent thing; we planned to stay in our home for the next 7 years and potentially in the area forever, I now have a very strong desire to move back to my hometown and be closer to family. I expect we'll move in the next 2-4 years; before DD is in school.

TL/DR: I'm thinking now I may look into smaller firms or lawyers who practice independently to see if their cost is less.

cbee817 · March 2016

We did everything for $350- the lawyer we used has his own office and his wife is the secretary.

hoffse · March 2016

That seems high to me, but that may be market for New England rates. New England and California have some of the highest legal rates in the country (seriously, they never cease to amaze me when I read about them). I would still call a couple other firms and see what their rates are. Usually smaller firms have lower rates, though not always.

The health directives and POAs should take basically no time. Mirror wills and the trust document can take some time, depending on how complex it ends up being. I can usually do a complete set of these documents within a day, unless we're doing something new or that requires extensive tax planning/research.

The complexity of your estate plan depends entirely on your wishes and projected assets. At a certain level you move from basic estate planning to more nuanced tax planning, and that gets very expensive - but many people won't fall in this category unless you anticipate a large inheritance.

I will say that in my profession, the conventional wisdom is to estimate high, rather than low when it comes to fees. If a client is willing to pay $3,000 then they will be pleasantly surprised if the actual bill is only $1,800. Happy clients lead to repeat business and referrals.

At the end of the day, this comes down to finding a lawyer you trust whose fees you can stomach. I don't want to say that you get what you pay for, because for simple estate planning that's not necessarily true... but it needs to be done right. I wouldn't go with the cheapest person out there if they don't take the time to learn about your family and your goals. When I finally get around to doing our wills, I will write the first draft, but I will pay one of our partners to review them before we sign anything. He charges around $600/hour, but he knows advanced tax planning inside and out. H and I will need some more advanced planning, and I am happy to pay that rate because I trust him implicitly.

short+sassy · March 2016

cbee817 said:

We did everything for $350- the lawyer we used has his own office and his wife is the secretary.

I totally misread this, at first, and thought it said, "his wife is in secret". Like he was secretly married. That perked my attention and I was like, "Whoa, what are the juicy details." Then I read it again and realized it wasn't a soap opera-like plot, lol.

cbee817 · March 2016

short+sassy said:

cbee817 said:

We did everything for $350- the lawyer we used has his own office and his wife is the secretary.

I totally misread this, at first, and thought it said, "his wife is in secret". Like he was secretly married. That perked my attention and I was like, "Whoa, what are the juicy details." Then I read it again and realized it wasn't a soap opera-like plot, lol.

haha- drama free there. I think they've been married for like 40 years!

maple2 · March 2016

We did all those things after having kids. I don't know the cost, though, because DH had legal insurance and the cost of our visits were covered through that. Our total annual premium was around $120. It sounds like we got a great deal!

LillibetteV · March 2016

If you're in New England (particularly Boston) those rates seem fairly reasonable. I'm a paralegal in Boston and rates are high. $3,000 is barely six hours of an experienced partner's time. Heck, it's less than 2 days worth of my time!

hoffse · March 2016

The other thing to look/ask about is whether they will have somebody with a tax LLM working on your will. I work at a larger firm, and virtually all of our estate planners have their LLM degree or are in the process of getting it. That means they can handle more complex stuff. For small shops, it's less likely that you will have somebody with that training doing your will.

I'll let you in on an open secret - we all use forms to start. But you will have significantly more options if you have a tax planner (rather than a generalist) do your will. Tax planners will delete and rewrite the tax provisions if they need to - most other lawyers will not touch form tax language at all.

I have seen wills from small shops that actually don't contain any tax references. Even basic wills need to have something about taxes in there because the caps might change between the time you execute the will and the time you die, and suddenly your estate is over the limit. The "estate planners" who ignore taxes completely are doing their clients a huge disservice IMO.

Obviously I have some strong biases on this, and you guys may not need advanced tax planning. It's just something to be aware of when deciding what to do though.

formerlyGDaisy09 · March 2016

thanks @hoffse (I was waiting for your input) I'm "glad" to hear that NE rates tend to be significantly higher, that may help me with my expectations. I do trust this person, but I do know a few other lawyers at smaller firms in town that I'll reach out to. I really do not think that we'll be doing anything all that crazy. we have modest incomes, own a small home on a small lot, and have only small investment portfolios at this point. H doesn't trust his parents with money and knows no one in his family would have the means to support our daughter or handle money appropriately; so we're in agreement (until my sister is more settled) that we'll be setting my parents up as guardians and setting up a simple trust for DD.

I'm also in the process of buying life insurance since we'll be losing that when I'm layed off from my job. Should we have those policies in place before we meet with a lawyer so we know exactly what kind of policies we're talking about?

formerlyGDaisy09 · March 2016

thanks @hoffse, I did check, my contact does have a LLM degree; she thought we'd be a good fit with a younger associate there, but I assume that since their firm has several people with LLM degrees the tax stuff would likely be in good shape.

formerlyGDaisy09 · March 2016

LillibetteV said:

If you're in New England (particularly Boston) those rates seem fairly reasonable. I'm a paralegal in Boston and rates are high. $3,000 is barely six hours of an experienced partner's time. Heck, it's less than 2 days worth of my time!

we're not in boston...but everything in our area is pretty equitable to Boston prices...without the Boston incomes. (one more thing in my plus column for relocation).

hoffse · March 2016

formerlyGDaisy09 said:

thanks @hoffse (I was waiting for your input) I'm "glad" to hear that NE rates tend to be significantly higher, that may help me with my expectations. I do trust this person, but I do know a few other lawyers at smaller firms in town that I'll reach out to. I really do not think that we'll be doing anything all that crazy. we have modest incomes, own a small home on a small lot, and have only small investment portfolios at this point. H doesn't trust his parents with money and knows no one in his family would have the means to support our daughter or handle money appropriately; so we're in agreement (until my sister is more settled) that we'll be setting my parents up as guardians and setting up a simple trust for DD.

I'm also in the process of buying life insurance since we'll be losing that when I'm layed off from my job. Should we have those policies in place before we meet with a lawyer so we know exactly what kind of policies we're talking about?

I would. Or at the very least, have a sense of whether it's going to be term or whole life, who will own the policy, and how much it's for. It doesn't necessarily need to be fixed yet, but it will help your lawyer if you can give them a range.

Also consider whether either of you guys are likely to get an inheritance. Obviously there are never guarantees, but if it's possible, it's worth mentioning that as well.

A good will can account for significant changes in assets over time and children who may not exist at the time of execution.

hoffse · March 2016

formerlyGDaisy09 said:

thanks @hoffse, I did check, my contact does have a LLM degree; she thought we'd be a good fit with a younger associate there, but I assume that since their firm has several people with LLM degrees the tax stuff would likely be in good shape.

Yes, I think you are correct. There will be somebody there who will make sure the language in their forms stays current, and they will probably contact you if the law ever changes such that your will needs to be updated (I know we do that for our clients).

I'm not saying every person who touches it needs to be a tax planner, but it does help if somebody with that training has oversight. I would be comfortable with that arrangement.

lbonga1 · March 2016

Can you set up some of that stuff using LegalZoom? I've personally never used it, but I've heard it can be cheaper. Any thoughts on using a website like that @hoffse?

LillibetteV · March 2016

formerlyGDaisy09 said:

LillibetteV said:

If you're in New England (particularly Boston) those rates seem fairly reasonable. I'm a paralegal in Boston and rates are high. $3,000 is barely six hours of an experienced partner's time. Heck, it's less than 2 days worth of my time!

we're not in boston...but everything in our area is pretty equitable to Boston prices...without the Boston incomes. (one more thing in my plus column for relocation).

I don't understand how people even live in most Boston suburbs without working in the city. At least for my job my salary would be significantly lower if I wasn't downtown and yet the houses aren't much cheaper in the suburbs! And I'm frugal! Perhaps they have some secret I haven't caught on to yet...

hoffse · March 2016

lbonga1 said:

Can you set up some of that stuff using LegalZoom? I've personally never used it, but I've heard it can be cheaper. Any thoughts on using a website like that @hoffse?

Oh man, I'll try not to get on a soapbox, lol.

My wills and trusts professor has a lecture titled, "What to do if your client used LegalZoom."

LegalZoom is awful. The problem with it is there are really odd/strange rules that vary state by state. A will that's enforceable in Georgia may not be enforceable in Alabama. The rules are so diverse, and LegalZoom doesn't account for the nuances state by state.

In law school I took a drafting class where we drafted basic business documents. Our first assignment was tearing apart a LegalZoom form. At the end of the semester the professor had us tear apart the ABA model document for the same thing. It was much better than LegalZoom's, but still not perfect. The point here is relying on form documents is a huge mistake. They might get you started, but that's all they will do.

formerlyGDaisy09 · March 2016

LillibetteV said:

formerlyGDaisy09 said:

LillibetteV said:

If you're in New England (particularly Boston) those rates seem fairly reasonable. I'm a paralegal in Boston and rates are high. $3,000 is barely six hours of an experienced partner's time. Heck, it's less than 2 days worth of my time!

we're not in boston...but everything in our area is pretty equitable to Boston prices...without the Boston incomes. (one more thing in my plus column for relocation).

I don't understand how people even live in most Boston suburbs without working in the city. At least for my job my salary would be significantly lower if I wasn't downtown and yet the houses aren't much cheaper in the suburbs! And I'm frugal! Perhaps they have some secret I haven't caught on to yet...

I ended-up here because I graduated college in 2009 and this was the only place I got a job in my field (despite hundreds of applications). I stayed because my husband had roots here and I was able to get my masters degree paid for. I love my job, and I love my boss, and before baby that was enough of a reason to stay. BUT now I want out.

formerlyGDaisy09 · March 2016

hoffse said:

lbonga1 said:

Can you set up some of that stuff using LegalZoom? I've personally never used it, but I've heard it can be cheaper. Any thoughts on using a website like that @hoffse?

Oh man, I'll try not to get on a soapbox, lol.

My wills and trusts professor has a lecture titled, "What to do if your client used LegalZoom."

LegalZoom is awful. The problem with it is there are really odd/strange rules that vary state by state. A will that's enforceable in Georgia may not be enforceable in Alabama. The rules are so diverse, and LegalZoom doesn't account for the nuances state by state.

In law school I took a drafting class where we drafted basic business documents. Our first assignment was tearing apart a LegalZoom form. At the end of the semester the professor had us tear apart the ABA model document for the same thing. It was much better than LegalZoom's, but still not perfect. The point here is relying on form documents is a huge mistake. They might get you started, but that's all they will do.

H suggested LegalZoom this morning when I told him how much the quote I got was for. I laughed, I've read your soap-box before...I told him that if we get this one wrong, DD is the one who will suffer, and we won't be there to fix it.

LillibetteV · March 2016

formerlyGDaisy09 said:

LillibetteV said:

formerlyGDaisy09 said:

LillibetteV said:

If you're in New England (particularly Boston) those rates seem fairly reasonable. I'm a paralegal in Boston and rates are high. $3,000 is barely six hours of an experienced partner's time. Heck, it's less than 2 days worth of my time!

we're not in boston...but everything in our area is pretty equitable to Boston prices...without the Boston incomes. (one more thing in my plus column for relocation).

I don't understand how people even live in most Boston suburbs without working in the city. At least for my job my salary would be significantly lower if I wasn't downtown and yet the houses aren't much cheaper in the suburbs! And I'm frugal! Perhaps they have some secret I haven't caught on to yet...

I ended-up here because I graduated college in 2009 and this was the only place I got a job in my field (despite hundreds of applications). I stayed because my husband had roots here and I was able to get my masters degree paid for. I love my job, and I love my boss, and before baby that was enough of a reason to stay. BUT now I want out.

I hope you find some place that works better for you! I'm a total Boston girl and the thought of not being near my loved ones and staring at the ocean every day makes cranky. But I get that it's definitely a special kind of place that isn't for everyone, particularly the weather. My flower buds are popping up through snow right now lol

formerlyGDaisy09 · March 2016

LillibetteV said:

formerlyGDaisy09 said:

-SNIP-

I ended-up here because I graduated college in 2009 and this was the only place I got a job in my field (despite hundreds of applications). I stayed because my husband had roots here and I was able to get my masters degree paid for. I love my job, and I love my boss, and before baby that was enough of a reason to stay. BUT now I want out.

I hope you find some place that works better for you! I'm a total Boston girl and the thought of not being near my loved ones and staring at the ocean every day makes cranky. But I get that it's definitely a special kind of place that isn't for everyone, particularly the weather. My flower buds are popping up through snow right now lol

HA! I mean we're in northern NE and our goal is to be near my parents, which is a different part of NE, but closer to the beach! my mom has daffodils about to bloom and got 3 inches of snow yesterday.

MommyLiberty5013 · March 2016

One of the many perks of working for a large commercial passenger airline (at least DH's in particular), the pilots get all their will and estate planning done for $75. When we moved to MN and had to redo all our stuff (living wills, POAs, trust, and wills ) it cost us a total of $75.

vlagrl29 · March 2016

I'm going to sound stupid but what is a joint trust?

All we have right now are the wills - we set those up when DD was 1 year old. It cost us $350. I figure once we have another kid we will update those wills and do the power of attorney, health stuff as well.

hoffse · March 2016

vlagrl29 said:

I'm going to sound stupid but what is a joint trust?

All we have right now are the wills - we set those up when DD was 1 year old. It cost us $350. I figure once we have another kid we will update those wills and do the power of attorney, health stuff as well.

There are different kinds of trusts, but usually a joint trust refers to a trust funded by two people during their lifetime - so both people are the grantors, instead of just one. They aren't good in every state, because some states treat marital property different than others. A good estate planner would know the best options in your state.

A lot of the wills I write have trusts embedded in them. They spring into being upon death. There are a lot of things you can do with them, including sheltering marital assets, making it easier to extend the estate tax exemption, etc.

A lot of small shop estate planners will tell you that you don't need anything more than a basic will and health directive/POA unless you have a lot of assets. They are usually right under current law (not always - some states have insanely low estate tax exemption limits that necessitate more elaborate planning). The problem though is that the law might change. If you are lucky enough to live another 40-60 years, don't you think there's a pretty good chance Congress is going to play with the estate tax rules between now and then?

If you stick with a basic will, it will cost a lot less than a more elaborate one - but then you should monitor the federal and state estate tax exemption limit through your lifetime to make sure your will doesn't need to be updated if the law changes.

I have never personally drafted a will or worked on an estate plan that didn't have tax considerations or a trust as a significant part of it. Granted, my firm tends to plan for more high-net-worth people than what smaller shops usually see, but not every client we see has the assets that would necessitate elaborate trusts if they died tomorrow. We still tend to leverage different kinds of trusts as a safety net in case our client's situation changes.

You do need a health directive and durable power of attorney in case you become incapacitated. Those are very important. All adults should have these in place, even if they don't need a will yet.

Erikan73 · March 2016

I live in Northeast Ohio & I have all of those items except the joint trust. I paid $175.00 for everything. Granted one of the benefits that my company offers is free will preparation. But I had to pay for the rest of the documents. But I can't imagine that it would be any more then $500.00 total. At the original time I was single, so I could see it being more for a couple, but still under $1,000.

I would call around to a few other law firms in your area and ask them, what is your rate to do all of these documents for two people. My impression is that law firms kind of have flat rates for these types of things. That way you can see if the rate you were quoted is high or average for your area.

formerlyGDaisy09 · March 2016

hoffse said:

vlagrl29 said:

I'm going to sound stupid but what is a joint trust?

All we have right now are the wills - we set those up when DD was 1 year old. It cost us $350. I figure once we have another kid we will update those wills and do the power of attorney, health stuff as well.

There are different kinds of trusts, but usually a joint trust refers to a trust funded by two people during their lifetime - so both people are the grantors, instead of just one. They aren't good in every state, because some states treat marital property different than others. A good estate planner would know the best options in your state.

A lot of the wills I write have trusts embedded in them. They spring into being upon death. There are a lot of things you can do with them, including sheltering marital assets, making it easier to extend the estate tax exemption, etc.

A lot of small shop estate planners will tell you that you don't need anything more than a basic will and health directive/POA unless you have a lot of assets. They are usually right under current law (not always - some states have insanely low estate tax exemption limits that necessitate more elaborate planning). The problem though is that the law might change. If you are lucky enough to live another 40-60 years, don't you think there's a pretty good chance Congress is going to play with the estate tax rules between now and then?

If you stick with a basic will, it will cost a lot less than a more elaborate one - but then you should monitor the federal and state estate tax exemption limit through your lifetime to make sure your will doesn't need to be updated if the law changes.

I have never personally drafted a will or worked on an estate plan that didn't have tax considerations or a trust as a significant part of it. Granted, my firm tends to plan for more high-net-worth people than what smaller shops usually see, but not every client we see has the assets that would necessitate elaborate trusts if they died tomorrow. We still tend to leverage different kinds of trusts as a safety net in case our client's situation changes.

You do need a health directive and durable power of attorney in case you become incapacitated. Those are very important. All adults should have these in place, even if they don't need a will yet.

Yes this! In the medical ethics courses I've taken this is the single biggest thing you can do for yourself and your family should you ever experience a health crisis. It allows your wishes to be made clear, which saves a lot of heartache and fighting amongst your family members, and also allows your medical team to make decisions that align with your wishes quickly.

So the other piece of this is that we're likely relocating to a different state (or we hope we're relocating) in the next few years. This firm that will cost $2000-3000 has explained that they prepare tailored documents. is it possible for them to prepare those so they might cover us post-relocation? or might we be better to find somewhere less expensive to get us covered short term and pursue higher quality documents after our long-term (goal in relocation would be finding our forever home) situation is more clear?

hoffse · March 2016

One last thing I should add - anybody who has a will is ahead of the general population, regardless of how simple vs. complex it may be.

Not everybody needs a will, but people with minor children or significant assets all do. Given that you can find somebody who will do a basic will for only a few hundred bucks (which should, at minimum, designate a guardian for your minor child), everybody should have that done around the time they start having kids. If money is tight, then do something basic to start and maybe revisit it in a few years when your assets start growing. Wills should be revisited every 5-10 years anyway just to make sure nothing has changed.

This is a personal pet peeve of mine, but I get ragey when I see parents who "need" a $500 stroller, but they won't pay for a basic will or life insurance to make sure their kid is going to be fine if they die. It seems like every month I get a gofundme request to raise money for a family who lost a parent, and now the other parent has 2 or 3 kids and no way to pay for a funeral or their basic expenses. That's because they never bothered to get life insurance. I always feel really bad for them, but I also have this moment where it's like, "Well yeah, you planned badly."

**Stepping off my soapbox**

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