One of the most important tasks you need to handle in planning for your own death is to draw up your last will and testament. The cost of creating a will depends upon the degree of complexity in your situation and whether you choose to write the will yourself or hire a lawyer to do it for you.
Below, we’ve outlined some important things you’ll need to consider when you’re putting together this important document.
Key Takeaways
- Setting up a will is one of the most important parts of planning for your death.
- Drafting the will yourself is less costly and may put you out about $150 or less.
- Depending on your situation, expect to pay anywhere from $300 to $1,000 or more to hire a lawyer for your will.
- While do-it-yourself will kits may save you time and money, writing your will with a lawyer ensures it will be error-free.
A Complicated Process
Drawing up a will isn’t as easy as you may imagine. Most people hear the word will and think that writing one is a fairly simple process requiring just a few minutes to designate the recipients of all your worldly belongings. On the contrary, there are many important facets to the document you have to consider—right down to how you word it.
If you have a lot of assets, run a business, and have more than one child or grandchildren, you need to take some time to make careful decisions about what happens after you die. Doing so now will help those you leave behind.
Start by making a list of all your assets—your home, vehicles, any valuables—along with all of your financial accounts, such as checking and savings accounts, certificates of deposit (CDs), life insurance policies, and investments. Then jot down all of your dependents and determine who will inherit each asset. Also note whether there are any special considerations you’d like to include in your will such as when minors will inherit your assets, how accounts will be split up, or what happens to your home after you die.
You can try drafting the will yourself or you can hire a lawyer to do the work for you. But even if you hire an attorney, you’ll still have to make these important decisions on your own.
The Cost of a Will
The fee for creating a basic will can range from free or practically nothing to more than $1,000. One medium-priced option is to purchase a do-it-yourself will creation kit online. Sites like LegalZoom, Trust & Will, or Rocket Lawyer provide online templates you can fill in with your pertinent information for anywhere from about $100 to $200. Several sites offer additional estate planning documents besides a will, such as a healthcare power of attorney or final arrangement forms, for example, for the same or a slightly higher price. Many will connect you with a lawyer for an additional fee.
But this may be too generic for you, leaving you the option to hire a professional. If you do hire a lawyer, though, it will be more expensive. The low end for having a lawyer draft a will is around $300, but it can easily cost $1,000 or more if your situation is more complicated.
Do It Yourself
Do-it-yourself kits to create and file a legally enforceable will have gained in popularity due to the minimal cost involved. If you don’t have a lot of complicated issues about your final wishes, your finances are fairly straightforward, and you don’t have any children, this may be the most suitable option for you. Kits can be purchased for as little as $13, so they give you the option of drawing up your will at your convenience without having to pay an outrageous cost. There is a lot less time involved, and you can generally make updates at your leisure without much difficulty or cost.
Before you settle with one of these kits, first read the reviews of the platforms selling the kits to find out what their customers say about this product. This is a relatively new business and many companies are racing to take a share in it while the quality varies from the legal providers.
Next, make sure you understand everything the kit entails including the legal language. You don’t want to sign a document you don’t fully understand. Also consider whether the document is enforceable in your state, as some documents don’t coincide with guidelines in certain areas. For the state compliance matter, contact the platform, ask them the question, and get their experience with other users from your state. You may be required to have witnesses or have your document notarized.
Remember that the basic will documents may not cover every life situation that should be addressed. That’s when you may need to move to the next step.
Hire a Lawyer
This is the best option if you have a complicated situation, a lot of assets, many beneficiaries, and a lot of dependents. While the decisions of what happens to your estate after you die are yours, an attorney can guide you through the process and help you word your will properly so there are no mistakes. After all, you are paying for legal advice, so it makes sense that you get the full benefit of an error-free will.
Keep in mind, though, hiring a lawyer to draft a document may cost anywhere from $100 per hour to $400 per hour or more. Some lawyers charge a flat fee for writing a will and other basic estate planning services, which may cost as little as $300 or as much as $1,200.
Important
Regardless of whether you write the will yourself or hire a lawyer, the decisions about what happens to your estate are yours alone.
Will vs. Living Trust
Some people confuse these two documents, believing they are one and the same, but they’re not. A will covers how assets are distributed after your death and allows you to appoint a guardian for any minor children.
A living trust, on the other hand, is a legal document created by an individual (the grantor) to protect their assets while they are alive and distribute them to designated beneficiaries after their death. A living trust is overseen by a trustee appointed by the grantor (often, the grantor acts as the trustee during their lifetime), who manages the trust assets according to the beneficiaries’ best interests. Living trusts typically cost about $250 for a DIY version or $1,500 to $3,000 or more for an attorney to draft one.
What Type of Lawyer Is Best for Wills?
An estate planning lawyer specializes in helping individuals and families create legal documents like wills and trusts and set up strategies to protect their assets, plan for inheritance, and avoid taxes after death.
What Happens If I Don’t Have a Will?
When you die without a will, the distribution of your assets will be decided by a probate court, according to the intestacy laws in the state where you lived. However, if you have named beneficiaries of insurance policies, retirement accounts, or banking accounts, those assets will pass outside of probate court to those beneficiaries.
Is It Better to Hire a Lawyer to Write a Will for a Flat Fee or Pay by the Hour?
The answer depends on your budget, how complicated your situation is, and what the flat fee would cover. For example, if you only need an uncomplicated will and no other estate planning documents, and a lawyer charges $200 an hour or a flat fee of $1,000, it likely makes more sense to hire them by the hour. It might be best to discuss your needs before you settle on the type of payment you’ll use.
The Bottom Line
A will is an important document to have in order to be sure your wishes for your property are carried out after your death. Dying without a will means you are intestate, and a probate court will decide how to distribute you property among your next of kin, according to the intestacy laws of your state. There are inexpensive options for creating a will and other estate planning documents that anyone can purchase and use. Just be sure to store them properly and update them properly when necessary.
Read the original article on Investopedia.