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Setting up an estate plan is one of the essential things that you can do for your family and loved ones. The estate plan is not something that any of us like to think about; however, it is a necessity, and it must be taken care of. When trying to determine the estate plan cost and all that is involved, there are some key factors that you must consider.
These costs are not universal, and there are times that it can cost you almost twice as much to go through this process. Knowing what components of the plan you need will most certainly help you get the best pricing. Let’s take a look at the estate plan cost and what you can expect.
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What Is Estate Planning?
Estate planning is essentially making a plan for what will happen to your assets should you die. This can be difficult to talk about; however, it is an essential plan to have in place. You work your entire life to build wealth, home, and financial stability. When you die, you will want to ensure that those assets go to the right people.
In addition, estate planning also includes things related to your decision-making skills about your own health and your own body. Sometimes things can happen, and you can’t make decisions for yourself. Who would you trust to step in? Without going through the estate planning process, there is no saying who could end up in charge of your money and your health.
Going through the estate planning process should be something that all young people do. Once you have the initial plan in place, you won’t have to do all that much to ensure that the plan is accurate. Sometimes just a quick email or a change form is all that is necessary to make updates throughout the years.
Estate Plan Components
Not all estate plans are the same. In fact, each one should be customized to your specific needs. However, there are some basic components that should be part of every estate plan. The components consist of the following items.
Your Will is also referred to as the Last Will and Testament. This is a document that explains how you want your money and belongings to be handled when you die. If you want to keep things simple more of the time, the Will is split evenly among children. Some wills can get overly complicated and have sections for all furniture and heirlooms that are in the family. As part of your will, it is also essential to make sure that the guardianship or children are correctly laid out.
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A trust is a smart option for younger people that have some assets that they would like to protect. With the trust, you can essentially handle all the mess of the will and dividing of the property while you are still alive. The trust is put in the name of the people who will be receiving everything, and it will not have to go through the courts in order to be distributed.
Power of Attorney
There is two power of attorney documents that you will need as part of your estate plan. One is the durable power of attorney, and the other is the healthcare power of attorney. These designate someone to make decisions for you if you are not capable of making decisions for yourself. These should be updated often if the people that you trust change from time to time.
The beneficiaries are the people who will receive assets should you die. In order to make sure that these people have easy access to your assets, they need to be designated as beneficiaries prior to death and instead during the estate planning process.
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Estate Plan Cost Breakdown
There are several fees involved in the estate plan cost. These fees are not set, and as you move from one area of the country to another and from one lawyer’s office to another, the fees will change.
It is entirely acceptable to ask for a quote on the estate plan costs so that you can ensure this is something that you can afford. As much as we stress the importance of an estate plan, you also must ensure that your costs make sense for you to continue with the process.
Many attorneys will charge for an estate plan by asking for a flat fee. The flat fee tends to be one of the most affordable ways to get this process done. When you call or email to make sure things are all correct, you won’t get any extra fees tacked onto your bill.
The flat fee is the easiest for those that have a simple will and plan on getting this process completed quickly.
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Some lawyers are going to charge by the hour. With hourly rate charges, you have to assume it will take the lawyer several hours to get the work completed. You should ask for an estimate as to how long they think the process will take.
If you haven’t already noticed, the hourly rates for lawyers are quite high, and if you don’t properly prepare for this, you may end up paying much more than you expected.
When all is said and done, you are going to want to obtain documentation of all that was recorded with the lawyer. This documentation is often necessary when you have a hospital stay or a special procedure done.
The documentation may be a part of the flat fee, but other offices are going to charge you for printing, signing, and delivering the final paperwork. The documentation fees are typically not all that large, but it is just another factor to consider.
Most of the time, an attorney will not charge you a consultation fee for your estate unless there are some complex situations. If you are dealing with large sums of money and different percentages across beneficiaries, then you can expect that there may be some consultation fees associated with this process.
However, for an average individual that needs estate planning, typically, a quote is given, and then appointments are scheduled. There is really no need to have a consultation; the process can be gone through as you are working with the attorney on the actual documents.
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Average Estate Plan Cost
Now that you understand the breakdown of the estate planning and the way that the costs are built up, you can start to figure out what the average costs are going to be. Although it is a wide range, most of the time, the estate plan cost will be between $300 and $1000.
Again, if your situation is a bit more complex, then you are going to have to pay thousands of dollars for the final product. The estate plan is something that you should not avoid because of costs.
Even if you have to get a lower-cost lawyer to get this process done for you, it is better to have an estate plan than not to have one. Let the lawyer know that you are on a budget and that you are looking to try and keep costs down if at all possible. Chances are they will have some basic options that will help you get the process done for a fair price.
Estate Plan Cost Recap
Going through the estate planning process is very important. You must determine that all of your assets are properly distributed and that you are protected should something happen to you. Setting up a state plan helps to keep the government and third parties out of the loop when death should occur.
The amount of paperwork that a person will have to deal with when a loved one dies is quite overwhelming. However, having an estate plan in place will help to ensure that this process is much quicker, more efficient, and much less costly. Call a few lawyer’s offices today and ask them for their basic estate plan cost. Ensure you are getting all the documents you need and get this taken care of as soon as possible.