Estate Planning - Frequently Asked Questions

How Much Does Estate Planning Cost? It depends on your individual circumstances and the complexity of documentation and planning required to achieve your goals and objectives. The costs may vary from lawyer to lawyer. Generally, the costs will include the lawyer’s charges for discussing your estate plan with you and for preparing your will, trust agreement, power of attorney or other necessary legal documents. Some lawyers charge a flat fee for estate planning services. Others charge on an hourly basis or use a combination of both types of fees.

Do I Need an Attorney for Estate Planning? It depends on your individual circumstances. If your assets are few and not complicated, you may be able to do it yourself, otherwise you should hire a professional. Consult with a lawyer or other financial advisor who is knowledgeable in estate planning, and who is not trying to sell a product that may be unnecessary—before considering a living trust or any other estate or financial planning document or service. Ask for time to consider and reflect on your decision. Do not allow yourself to be pressured into purchasing an estate or financial planning product. If you do not know a lawyer who is qualified to help you with your estate plan, ask someone whose judgment you can trust—a friend or employer, for example. Or call a local State Bar-certified lawyer referral service. Most of these services offer half-hour consultations for a modest fee. Attorneys who are members of certified lawyer referral services must carry insurance, agree to fee arbitration for fee disputes, meet standards of experience and be State Bar members in good standing. In addition, certain State Bars certify “specialists” in legal areas such as estate planning, trust and probate law. The designation of “specialist” means that the attorney has met certain standards. If you do decide to hire a lawyer, make sure that you understand what you will be paying for, how much it will cost and when you will be expected to pay your bill.

Can I Do It Myself or is it Too Much Work? Again, It depends on your individual circumstances. It is possible for a person to do his or her own estate planning with forms or books obtained at a stationery store or bookstore or from the State Bar. At the very least, a review of such forms can be helpful in preparing you for estate planning. If you review such materials and have any unanswered questions, however, you should seek professional help. For example, if you have never worked with a financial advisor, chances are that your asset size is small and you can probably do it yourself since you may not have complicated tax implications.

Consideration for Minor Children First of all, in your will, you should nominate a guardian to supervise and care for your child (and to manage the child’s assets) until he or she is 18 years old. this is usually your significant other or spouse. However, you are free to appoint anyone as your trustee. Most states laws would not allow a minor minor child (a child under age 18) to be legally qualified to care for himself or herself if both parents were to die. Nor is a minor legally qualified to manage his or her own property. Your nomination of a guardian could avoid a “tug of war” between well-meaning family members and others. You also might consider transferring assets to a custodian accounts allowed by certain states until your child reaches age 18, 21 or 25. Or you might consider setting up a trust to be held, administered and distributed for the child’s benefit until the child is even older.

Selecting Alternate Beneficiaries you are allowed to select alternate beneficiaries for your estate. These beneficiaries could be different than the one you may have on your life insurance policy or retirement account. You should consider alternative beneficiaries in the event that your primary beneficiary does not survive you. And if a beneficiary is too young or too disabled to handle an inheritance, you might consider setting up a trust for his or her benefit under your will or living trust.Once you have decided who should receive your assets, it is very important that you correctly identify those chosen individuals and charitable organizations in your will or trust. Many organizations have similar names and, in some families, individuals have similar or even identical names. An estate planning lawyer can help you clarify and appropriately identify your beneficiaries.

What is a Probate Process? Probate is a court-supervised process for transferring a deceased person’s assets to the beneficiaries listed in his or her will. Typically, the executor named in your will would start the process after your death by filing a petition in court and seeking appointment. Your executor would then take charge of your assets, pay your debts and, after receiving court approval, distribute the rest of your estate to your beneficiaries. If you were to die intestate (that is, without a will), a relative or other interested person could start the process. In such an instance, the court would appoint an administrator to handle your estate. Personal representative is another term used to describe the administrator or executor appointed to handle an estate. Simpler procedures are available for transferring property to a spouse or for handling estates in which the total assets amount to less than $100,000. The probate process has advantages and disadvantages. The probate court is accustomed to resolving disputes about the distribution of assets fairly quickly through a process with defined rules. In addition, the probate court reviews the personal representative’s handling of each estate, which can help protect the beneficiaries’ interests.

One disadvantage, however, is that probates are public. Your estate plan and the value of your assets will become a public record. Also, because lawyer’s fees and executor’s commissions are based on a statutory fee schedule, a probate may cost more than the management and distribution of a comparable estate under a living trust. Time can be a factor as well. A probate proceeding generally takes longer than the administration of a living trust. Discuss such advantages and disadvantages with an estate planning lawyer before making any decisions.