As much as we would all prefer to live forever if nature permits, the hard truth is that death is inevitable. One of the best ways to control what happens after we leave is to plan how our wealth is handled.
You do not want a situation whereby your estate tears the family apart. It is worse if your inheritor squanders all you have ever worked for.
Probably you have heard about how estate planning could help avoid but wondering how much it would cost.
Worry no more; this article is written for just that.
What is Estate Planning?
For people who do not fully understand estate planning, it is a process whereby a legal document is prepared for how the property of an individual is shared after demise.
It is simply a legal document containing the estate owner’s wish, but in this case, it has the backing of the law.
Importance of estate planning
Before discussing how much estate planning costs, you need to understand the importance of what you are spending your money on. If the importance listed here does not convince you to spend a dime on estate planning, then you should not.
However, we believe you will want to hire an estate planning lawyer right away after reading this.
Safeguards young family members
Estate planning can help ensure young family members get something from your property. The older siblings might cheat them in its absence, and they get nothing. They might be able to notice this when they are more mature, but that would be years after, and it would have been too late.
Aside from that, estate planning can protect young children from making wrong financial decisions. Including a clause that stipulates they must have attained a particular age and achieved certain things, such as graduating from university, can help them make an informed decision on how to spend their acquired wealth.
Avoids tax
This is why super-rich individuals are usually associated with estate planning. Today, many people have realized its importance, and anyone with substantial wealth can take advantage of it.
Estate planning as of 2022 exempts each of your heirs from federal tax if the inheritance is no more than $12.06 million.
Prevents family mess
There is nothing else parents would distaste than seeing their children fighting over the estate. Sometimes, this kind of mess escalates to the extent the media cover it.
Stopping such fights before they start is one of the benefits of estate planning. It will enable you to choose who manages your estate if you become mentally incapacitated.
You will also be able to make plans for the child with health problems; set up a trust for the one you are sure would be fine without the inheritance; also reward the child that did most of the caring during your later years.
Protects lifetime legacy
If there are things you would like to remain the same even after your demise, it can be achieved with estate planning.
A business succession plan, for instance, will help you influence the transition of the business to a new owner.
Types of estate planning and how much they cost
There are different types of estate planning, and they are more complicated to prepare than each other. This is why their pricing varies; hence, your choice will influence your total cost.
- Wills and Codicils
A will is ambulatory; that is, it takes effect only after the testator’s death (the person making the will). It includes details of estate distribution, funeral arrangements and other things you wish to include.
Codicil, on the other hand, is an addendum to the will. It explains, amends or nullifies part of a will.
Last Will and Testament can cost as little as $150, depending on the complexity. Hiring an attorney for a well-prepared executed will can cost as much as $1,500.
- Trusts
- A trust, unlike a will can be executed while the grantor (estate owner) is still alive. It gives the trustee power to hold and manage the properties on behalf of the grantor’s heirs.
- The trustee will transfer the same estate to the beneficiaries as indicated in the trust document. It does not require probate; therefore, your family issue will not add to a court record.
- A trust can cost anywhere under $100, but you get the equivalence of your payment. Meanwhile, hiring a trust attorney for a well-prepared trust document can cost you between $1,500 to $2,000. For high-net-worth individuals, it can cost as much as $7,000.
- Deed of Gift
A Deed of Gift covers the voluntary transfer of property, such as a building, to a donee by a donor without expecting compensation. It is irrevocable once executed.
It will cost you about $500.