Let's face it. The last thing people want to do is plan for their death. There are a lot of important decisions you need to make—decisions you shouldn't leave to your loved ones. These include saving for and planning your funeral, appointing a power of attorney, designating beneficiaries for all your accounts, setting up your kids—especially if they're fairly young, planning your estate, and setting up your last will and testament.
This last one is probably one of the most important things you'll have to do. Below, we've outlined some important things you'll need to consider when you're putting together this important document.
- 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 between $300 and $1,000 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 it's a fairly simple process. The idea most people have is that it requires a few minutes to designate the recipients of all your worldly belongings. But that isn't true. In fact, 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 in the end.
Make 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), and life insurance policies. Then jot down all of your dependents and who inherits each asset. Also note that if there are any special considerations you'd like to include in your will such as when minors 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. We'll look at the benefits and drawbacks of both a little later in this article.
The Cost of a Will
The fee for having a basic will written can be as little as $150—fairly reasonable and affordable for most people. Consider purchasing a do-it-yourself will creation kit that can be purchased online or in stores for less. These are generally templates you can fill in with your pertinent information online. If you require more complicated or additional estate planning documents, be prepared to dish out more cash. It can cost $1,000 or more in advanced situations.
But this may be too generic for you, leaving you the option to hire a professional. If you do hire a lawyer, though, you should be aware that it's going to come at a price. 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 $10, so they give you the option of drawing 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, 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. You may be required to have witnesses or have your document notarized.
Remember that the basic will documents within may not cover every life situation that should be addressed. That's when you 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. And if you decide to make any changes, it will cost you because it means another trip to the lawyer.
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
There tends to be some confusion between wills and living trusts. Many people believe these 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 more comprehensive estate planning tool that covers not just the issues that a will addresses, but also allows for the establishment of medical and legal power-of-attorney if you become incapacitated. It also appoints a successor trustee to handle any legal and financial matters upon your death. Living trusts typically cost $1,000 or more to establish but are considered more complete planning tools compared to a will.