Along with funeral wishes, the estate planning process includes writing a will to help protect loved ones after you’re gone. We’ll cover how much a will costs and give you some solutions to help you choose an option. The complexity and size of your estate are key in determining which option is best for you.
Do you need a living trust or a will?
Including a living trust or will in your estate plan is one of the most important steps to ensure your net worth and family are secure at the end of your life.
According to the American Bar Association, if you die without a will, the state you reside in will have the power to distribute your assets according to that state’s laws.
A will allows you to provide specific instructions on how you want your assets divvied up after your death. In addition to your property and personal possessions, you can also name a legal guardian to take care of any children who are minors upon your passing. You’ll then select an executor who will carry out your legal wishes.
A living trust is a legal document that allows someone to make financial decisions about someone else’s assets. People often do this to ensure their financial wishes are carried out if they cannot execute them because of illness or injury. Trusts can be revocable (able to be modified during the person’s lifetime) or irrevocable (unable to be changed).
Options for how to make a will
Three of the most common options for making a will are a holographic (handwritten) will, a do-it-yourself will (which you can create online) or a traditional will drawn up by a lawyer.
Image: 3-common-options-for-making-a-willCost of a holographic will
A holographic will is the most affordable option because it’s usually free. In most states, you must write it entirely by hand, sign it and meet other state-specific requirements for it to be valid.
Research the requirements for holographic wills in your state and talk to an expert if you are unsure how to do it correctly. Any errors in your will could lead to consequences and other potential problems after you’re gone.
A holographic will may be a good solution if you don’t have dependents and a relatively simple estate. However, it is not recommended if you have more-complex assets.
Key takeaway: Creating a holographic will may seem appealing since there’s no associated cost, but it may cost you in the long term if it’s not executed properly based on state requirements.
Cost of a do-it-yourself will
A do-it-yourself will can be another cost-effective option. Many online estate planning products offer do-it-yourself wills you can purchase and complete online. You can also download free templates or purchase kits that give instructions on filling out the template, reducing the chances of making mistakes.
These companies will help you create the documents your estate plan will need as you start end-of-life planning. Prices for online wills can vary based on how many documents you create, monthly fees versus flat fees and if an attorney provides guidance.
Online do-it-yourself will planning isn’t always the best option to prepare the specifics of your estate. The state you live in, your desires and your personal needs should all be considered, and it may be a good idea to consult with a lawyer throughout the process.
Key takeaway: Using an online will maker reduces the chance of error in your do-it-yourself will, but you should still have a lawyer check it to ensure it will hold up in court.
Cost of making a will with a lawyer
If you have a complex estate, hiring a lawyer can be a good option to ensure your will is legally binding and error-free, but it can also be expensive. Several factors can influence the fees of hiring an attorney, costing you hundreds to thousands of dollars.
Key takeaway: Hiring an attorney to draft your will is one of the best ways to ensure your estate plan is ironclad and free from loopholes or inconsistencies others can challenge, but you’ll likely pay more than the other options.
Image: what-impacts-the-cost-for-a-lawyer-to-write-my-willWhat impacts the cost for a lawyer to write my will?
Your location, your estate’s value, your lawyer’s experience level and legal fees all contribute to the cost of having a lawyer write up your will.
1. Your location
Each state has its estate planning laws and requirements for a legally binding will, so it may be important to find a local lawyer to draw up your will who is familiar with your state ordinances.
2. Your estate’s value
The more complicated the estate, the more time your attorney will spend. Larger estates over $1 million may be better suited for a trust than a will since trusts are more comprehensive and avoid the probate process, saving your beneficiaries’ time and estate taxes. The more valuable your assets are, the more you can expect to pay for your will.
3. Your attorney’s experience level
If you hire an attorney with more than 20 years of experience, their fees will typically be significantly higher than a lawyer fresh out of law school. If your estate is complex, it’s recommended that you hire an expert attorney who may come with a high price tag.
4. Your attorney’s fee structure
Your attorney will either charge you a flat or hourly fee for meeting with them and drawing up a will. If they charge an hourly fee, get an estimate of the anticipated time before you begin and know what their hourly rate is. Most lawyers charge between $100 and $400 per hour or more depending on their experience level and the difficulty of the case. If you’re aiming to save money but still want the peace of mind that your will is complete, see if an attorney is willing to consult with you and review the will you made yourself.
