The Most Expensive Estate Plan

When planning your estate, there are several costs to consider. These costs include the dollar cost that you pay for your estate planning, the dollar cost that your Beneficiaries will pay on your death, the time your Beneficiaries will have to wait to receive their inheritance and the degree of control you have over what happens with your estate (who will manage the process and who will receive the benefit.)

This article examines the cost of estate planning for an estate of $500,000.

Intestacy/Probate

If you have assets in your name alone with no designated Beneficiaries, at your death your assets will pass to your loved ones under the laws of intestacy. Intestacy laws identify who will receive your assets, starting with your spouse and children. If you do not have a spouse or children who survive you, your assets will go to more remote family members who survive you, using the table of consanguinity (click here to view the table of consanguinity). These laws only identify family members as your Beneficiaries; they do not identify any charities, friends, co-workers, etc. to be your Beneficiaries. This process requires probate to be opened, which can take several years. A judge will decide who your Executor is, again based on which family members survive you.

The dollar cost of probate is set by law. The Executor and the attorney each are entitled to compensation. The court-appointed referee who evaluates your estate is entitled to compensation. There are also filing fees and court costs. While intestacy costs you nothing during your lifetime, for an estate of $500,000, it will cost you approximately $28,000, take one to two years, and you do not get to choose your Executor or your Beneficiaries.

Will/Probate

If you hire an attorney to draft a Will for you, that attorney will charge you approximately $1,000 to prepare your Will and to oversee the signing of the Will. In your Will, you nominate an Executor and at least one back-up Executor in case your first choice is not available. In your Will, you will also name your Beneficiaries. However, your loved ones will still need to open a probate, and the costs are the same as the probate costs for intestacy (estimated at $28,000 for a $500,000 estate above).

For an estate of $500,000 probated with a Will, the final estimated cost is $29,000. However, you get to choose your Executor and your Beneficiaries.

Estate Planning Attorney/Trust

The cost of estate planning attorneys varies, but most attorneys will charge between $2,000 and $5,000 for a basic estate plan that includes a revocable living Trust, a pourover Will, an Advance Health Care Directive, a Power of Attorney and a Grant Deed. More complicated estate plans that include asset protection will cost in the range of $10,000. These plans give you greater flexibility about when and how to distribute your assets, which can be helpful if you have Beneficiaries who are minors or otherwise lack the capacity to manage the assets.

Assets that are in your Trust at your death will be distributed by your Trustee to your Beneficiaries without probate. This saves your loved ones the dollar cost and the time cost of probate. You get to choose your Trustee and your Beneficiaries, and Trusts are more flexible than Wills.

California Trusts Online/Trust

By investing a little time now to read our educational resources and to understand the estate planning process, you can create your own estate plan with California Trusts Online, saving you thousands of dollars. With a Trust, you avoid the dollar and time costs of probate. With California Trusts Online, you receive the benefit of an attorney-drafted documents so you get to choose your Beneficiaries and your Trustee.

*Assumes a total estate value of $500,000

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