How much do lawyers cost? Well that’s a loaded question that no lawyer wants to answer. And yet, every client and potential client wants to know—“what’s this gonna cost me?” Well as a lawyer I have no desire to discuss this on a blog post put out into the public realm. Or if I do discuss it, I want to state it in either general terms that avoids the question, or highly specific terms that makes no sense to anyone—even me.
As a human being, however, I have a desire to just tell it like it is. We all know legal services are not free. So why not talk about the costs using specific examples that gives people some idea of what they are in for?
Part 1: Transactional Lawyer Work (and Fees)
Before we start throwing out numbers, we need to discuss the different type of legal services a firm, such as mine, undertakes. There’s two broad categories: “transactional” services which are things like estate planning, uncontested trust administrations, probate (uncontested), and the like; and “litigation” which is all the contested court work like Will and Trust contests, Trustee breach of duty, abused beneficiary cases, and the like. In this post, I will discuss the transactional attorneys fees you can expect to pay:
1. Estate Planning–$2,500 to $5,000. If you are going to use a lawyer to create an estate plan for you, then you should expect to pay in the range of $2,500 to $5,000. Some attorneys will flat fee an estate plan for you, and others do not. And I’m sure there are some lawyers who bill less than $2,500 (and I know there are lawyers who charge more than $5,000), but this is the typical range you can expect from a lawyer drafted estate plan.
I tend to charge around $4,000 to $5,000 for estate plans that I do. Why so much? Well I like to spend a good deal of time preparing a proper estate plan. Throwing together a Trust and Will for someone without thinking through how that affects all of their assets and family situations is not helpful to anyone. I think I provide more in value than I charge, but not everyone agrees and that’s okay. The point is to find a lawyer with whom you feel comfortable.
2. Probate—Percentage of the estate. Probate fees are set by statute, you can read my previous post on how they are calculated. I have heard some people (o.k. lawyers) say that the statutorily set fee is a “mandatory” fee or a “minimum” fee—not true. The statutory fee is a maximum fee that goes to the attorney who handles the probate. In most modest estates, those with assets less than $1 million, the statutory fee is about right for the amount of work to be done. For estates in excess of $1 million, the statutory fee may be more than is necessary to handle the estate, especially if it is an easily handled, liquid estate with no contestants. In those cases, lawyers can reduce their fees from the statutorily set maximum, but few do so.
I have reduced my probate fee on estates in excess of $1 million depending on the underlying circumstances, so ask around and see what kind of deal you can get if you have a larger estate to probate.
3. Trust Administrations–$2,500 to $5,000 (to $10,000??). When someone dies who has created a revocable, living Trust during his lifetime, the Trust has to be administered in order to pass the assets to whoever receives them. Sometimes the assets are placed in Trust for a surviving spouse, sometimes in Trust for children or grandchildren, and sometimes it is just an outright distribution to children. In each of these cases, an administration is necessary because there are notices that must be sent, appraisals that must be obtained, rules to follow, and Trust terms to carry out.
The Trustee is entitled (and encouraged) to have a lawyer help them through this process to be sure it is all done correctly. What does that cost? Well that depends on many factors such as the size of the Trust, the complexity of the Trust provisions, the difficulty of the beneficiaries, and the issues that arise in dealing with the beneficiaries.
In my experience that typical range for a run-of-the-mill trust administration is $2,500 to $5,000. If, however, the estate is big enough to trigger the need to file an Estate Tax Return, then you can add $10,000 or more to that number. Of course, your Trust estate would need to be in excess of $5.325 million as of 2014 to trigger a Estate Tax return so an extra $10,000 shouldn’t be too problematic for an estate that large.
But when the Trust administration becomes contested, due to a disagreement between a Trustee and beneficiary, that can also add anywhere from $2,500 to $5,000 or more to the cost even if the problem does not end up in court.
You also have to add to that the hard-costs of obtaining things like appraisals, recording deeds, and hiring accountants for Trust accountings (if one is required). So all told, attorneys’ fees and hard-costs will likely cost from $4,500 to $8,000 or so.
Well that’s the deal for transactional matters. My next post will talk about the fees for litigation matters.