Estate Planning

Estate Planning - Value vs. Price

By Greg Herman-Giddens

Recently I met with a couple who had an estate of over $2 million, and wanted to safeguard their daughter's inheritance.

I advised them that it would be prudent to establish living trusts with credit-shelter trusts to avoid the cost and delay of probate and eliminate or reduce estate taxes at the death of the second spouse to die.  I also recommended a lifetime trust for the daughter to protect her funds from divorce, lawsuits and her own poor judgment.  I further suggested pour-over wills, durable powers of attorney, health care powers of attorney, living wills and HIPAA Authorizations.

This plan, which includes state of the art documents, advice regarding funding the trusts, allocation of assets and beneficiary designation choices, was $4,500.  While I am certainly not the least expensive attorney in town (nor would I want to be), I feel the fee was reasonable given the complexity of the plan, the benefit of my years of training and experience, and the potential tax savings of over $500,000.

However, these particular clients failed to see the value in what I could provide for them.  It's partially my fault, I suppose, for not doing a better job of educating them.

They called my assistant and said that they decided to use another attorney who would do the "same thing" for $2,000 less.  I looked up the name of the attorney, whom I had never heard of, and found that he has only been licensed to practice law for five months, and works for a firm that has no estate planning attorneys and its website does not even state that it does any estate planning.

So, this couple saved a couple of grand now, but at what future cost? 

• Not properly funding the trusts to avoid probate - $5,000 - $10,000
• Not providing proper language to allow stretching of retirement plans - tens of thousands of dollars
• Failure to arrange assets to fund the credit-shelter trust - several hundred thousand dollars. 
• Failure to properly protect the daughter's funds so that she will have adequate support for the rest of her life - priceless.

If your family and your property are important to you, then in choosing an estate planning attorney and type of estate plan, then it's imperative to look beyond the price and see the value.

Full post as published by North Carolina Estate Planning Blog on September 03, 2010 (boomark / email).