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Estate planning is an important step in ensuring you and your loved ones are properly cared for. Fees for this service vary widely, as there are so many different aspects to estate planning.
An estate planner helps clients create wills, living trusts, revocable trusts, powers of attorney, advanced medical directives, and much more. They may represent beneficiaries during probate or defend a contested will.
All of that said, though, there are average costs and fees associated with hiring an estate lawyer.
This depends on the types of services you require, your location, the size of the law firm, and what type of fee structure the attorney uses.
A basic review of your finances and drafting legal documents, such as a trust or a will, averages between $800 and $2,000. However, any complexity in your situation easily adds hundreds, if not thousands, of dollars to that estimate. If you have property in other states, were married multiple times, or had children with multiple partners, your estate planning becomes more complicated.
What is the Attorney's Fee Structure?
Most attorneys employ either an hourly rate or a flat fee. However, probate lawyers sometimes charge a percentage of estate. If you're looking for a lawyer simply to handle probate, avoid this last fee structure if possible, as it is usually much higher than either an hourly or a flat fee.
Hourly rates vary widely. If you live in a small town and hire an attorney from a smaller firm, you'll probably pay around $150 per hour. In a city, expect to pay $200 at a minimum, and in a large urban area, hourly rates of $300 or more are common.
The work of the attorney's support team, typically new attorneys and paralegals, should come at a much lower rate. These employees perform much of the routine paperwork.
Typically, an hourly attorney bills in increments of time, such as six minutes or 20 minutes. This means you don't pay for an hour of time for a simple phone call or email.
Some attorneys perform estate planning work under a flat rate, since they generally know the amount of work that these services require.
Rates vary depending on what you need done, so before agreeing to a flat rate, understand exactly what it covers. Recognize, as well, that a flat rate may not cover necessary tasks, such as filing costs and appraiser fees.
Percentage of the Estate
Only a few states allow probate lawyers to charge by calculating a percentage of the estate. Even if your state allows it, it does not require it, so you don't have to use an attorney with this type of fee structure. If the lawyer won't negotiate an hourly or flat rate instead, look for another attorney.
The main issue with this type of fee schedule is how expensive it is for the client. Typically, fees are calculated using the gross value of the property, not the net value. This means that if your house is valued at $200,000, but you still owe $100,000, the lawyer's fee is a percentage of the $200,000 value rather than the actual equity in the home.
States that allow this fee schedule establish guidelines. In California, for example, the fee is 4 percent of the first $100,000 of the estate's gross value, and 3 percent of the next $100,000. So, for an estate valued at only $200,000 (an easy number to reach if it includes a single home, especially in California), the attorney's fee is $7,000.
As the value of the estate rises, the fees keep adding up, because each fee is added to the next. For the amount of legal work required, this fee schedule makes little sense for the client.
Get it in Writing
No matter the laws in your state, request that the attorney provide the terms of the lawyer-client agreement in writing. This should include:
- How invoices describe work performed on your behalf – you want to see increments of time and the type of task performed
- The billing schedule
- The due dates for each payment
- The estimated total cost of fees
- The estimated total for legal costs
- The fees (whether a flat rate or hourly) of any law firm employee assigned to your estate
- The name and contact information of your main contact
Schedule a Free Consultation
If you are ready to begin estate planning, schedule a free consultation with an estate planning attorney to discuss your needs. He or she will explain rates, services, and answer questions.