Costs Related to Death and Property
Lawyers are typically secretive about their fees, until you are in their office, and actually have no choice but to pay. Well, let’s change that.
My hypothetical family consists of a husband and wife, US citizens, who own one house worth $800,000, have a $450,000 mortgage on the house, and have one six year old kid. Both parents are W2 employees in large companies, and their total net worth, including the house, is $1.3m. The remainder, $500,000 is in a 401k with each other first, and then children as beneficiaries.
The typical estate plan package I’m using here includes a revocable trust, transfer of the house into the trust, and wills, powers of attorney, and health care directives for both spouses. The flat fee includes all associated costs and expenses.
Please keep in mind that what I’m doing here is very fact-specific, so these prices are an approximation, and should not be taken literally! Also, the description of things to do is a vague approximation of things that must actually be done, there for illustration only, and definitely should not be relied onto as an actual legal checklist in a real life situation. Should you have any questions, please schedule a free consultation!
So, here’s a very vague approximation of fees and costs involved in estate planning (or lack thereof):
|Phase of Life||Estate Plan||No Estate Plan|
|Planning ahead before anything happens||$2,400 - $3,400, flat fee||$0|
|Husband dies||$1,000 to make Wife an official sole Trustee, clear up real estate title||$1,000 to make sure all is taken care of and remove Husband’s name from title to the house.|
|Wife, now the only parent, dies. Minors are left with no parents.||$5,000 to attorney to figure out what to do with the house, appoint successor trustee, fund minor’s trusts, and do other trust administration things. $5,000 to successor trustee for the services above. The 401k with a $500k balance is transferred to the minor, taking advantage of the fact that the family’s revocable trust qualifies as “see-through” by the IRS.||$19,000 (one-time payment) to probate attorney to transfer the house (probate fees are based on the total value of the estate, disregarding the mortgages. 401k is not subject to probate, so this fee is based on the $800k house). $19,000 (one-time payment) to executor for the services above. $4,000 to guardianship attorney and court to set up guardianship of estate of minors. $1,000 to proposed guardian for same services. The 401k with a $500,000 balance is cashed out, incurring early withdrawal penalties.|
|Ongoing costs until the minor is of age.||Nothing happens, as the trust doesn’t terminate until much later. The money remains in the trust. Child wants a new car – has to ask the trustee, and the trustee buys him a used Honda.||Between the setup and the 18th birthday, if the funds are in a blocked account, the court must be petitioned every time the guardian wants to use the funds, incurring hundreds if not thousands of dollars of attorney fees. The annual costs will go into thousands, if the money is actually used.|
|Child turns 18.||Nothing happens, as the trust doesn’t terminate until much later. The money remains in the trust. Child wants a new car – has to ask the trustee, and the trustee buys him a used Honda.||The guardianship is terminated, the money is released to the child. The child buys a new Porsche.|
|Child reaches the age specified in the trust.||The money is released to the child, the trust is terminated. $1,000-$2,000 to terminate the trust and file final tax returns.||-|
So, should you want to schedule a free consultation to do some estate planning, you can visit modlinlegal.fullslate.com or just email firstname.lastname@example.org directly.
"It is hard to express how great we, my husband, and I appreciate Marina Modlin service in our conflict with the City Hall regarding our trust. Her high professional skills combined with insistence allows not only solving our personal problem, but making possible to change City Hall rules related to the corresponding problems. I highly recommend Marina Modlin as the best will and trust attorney."
Galina O., as posted on Yelp on 7/13/12