Forex Articles

Estate planning can be an expensive process, costing anywhere from $800 to $4,000 for wills, powers of attorney, medical powers of attorney, and medical directives. Of course, having this paperwork in place can save tens of thousands of dollars for heirs who don't have to fight over who gets what assets or pay expensive probate fees to lawyers. The paperwork also reduces the risk of the state distributing assets, which can have negative consequences for heirs.

Let's take a look at a few ways to reduce estate planning attorney fees to make the process more affordable for anyone. (For related reading, see: Estate Planning: 16 Things to Do Before You Die.)

There are many legal websites that make estate planning a do-it-yourself endeavor, similar to setting up corporations or paying taxes. For instance, LegalZoom provides an estate planning bundle that starts at just $149.00 for one or $249 for two, and comes complete with a last will and testament, power of attorney, living will, and independent attorney advice for one year. These services may be sufficient enough for individuals with basic estate planning needs.

The DIY estate planning process involves filling out an online questionnaire that's used to generate state-specific documents that are reviewed by experts and mailed. Then, the documents must be signed to make them legally binding and then stored in the proper places to be available as-needed in the future. These plans can be supplemented or upgraded with additional services, such as living trusts or pour-over wills, among others.

Attorneys should provide an overview of the costs involved with preparing estate planning documents before meeting in person. In addition, requesting the fees demonstrates fee-sensitivity and could result in a more reasonable price than simply paying whatever is charged with no questions asked. Most estate planning documents should cost between $1,000 and $1,500, although these figures may vary based on an individual's situation. (For more, see: Advanced Estate Planning: Introduction.)

It also pays to shop around when looking at different attorney options, since prices can range significantly within a given area. While a list of local estate planning attorneys can be found online, the rates they charge are rarely publicly listed, which means they must be contacted for an estimated cost. Some attorneys may also offer free consultations, although the risk of an in-person visit is being pressured to make a decision on the spot.

Estate planning fees may be tax deductible when they relate to the production, maintenance, or generation of taxable income or if they are considered tax advice or tax planning related. If these conditions apply, the expenses may be qualified as miscellaneous itemized deductions on Schedule A of a tax return. IRS Publication 529 lists tax advice fees and legal fees related to producing or collecting taxable income as potential areas for deductions.

Those planning on taking a tax deduction should request an itemized invoice to indicate the cost of specifically deductible services, rather than trying to estimate deductions based upon a non-itemized invoice. That way, if the IRS requests additional details regarding the deductions, or in the event of an IRS audit, there is a reliable paper trail in place. It's also advisable to consult with a CPA before claiming any deductions to avoid any problems.

Estate planning is an expensive but necessary process for everyone who has assets that they'd like to distribute after they pass away or who has medical decisions they'd like to make. Those looking for the cheapest option may want to look toward websites like LegalZoom or Nolo for do-it-yourself paperwork options. Those using attorneys should be sure to get a quote before meeting in-person, if possible, to ensure they understand the costs in advance. When using attorneys, it may be beneficial to request an itemized bill in order to deduct estate planning expenses from income taxes to recoup some of the cost. (For more, see: Do You Need an Estate Planning Lawyer?)