Depending on where you live, setting up a will can cost $200 to $1,000 for an hour or two of an attorney's time. Is it money well spent? It is if you want peace of mind that your estate will go where you want it to go.
You don't have to be a celebrity with millions in assets to pass along to your heirs to need a will. Without a will or a trust, the fate of your finances could end up being decided in a courtroom and may not be dispersed in the way you had planned, according to Danielle Mayoras, co-author with her husband, Andrew Mayoras, of the book Trial & Heirs.Mayoras recommends setting up a trust, which can run a few thousand dollars, making it more expensive than a will to set up. When all of a person's assets are put into a trust, their name is taken out of the equation so that a probate court doesn't have to get involved.
"Having a will is better than nothing at all," she said.
In probate court, the assets of someone who died are administered by the court, whether or not they had a will. Probate court costs vary by state, but in California they're 2% to 4% of the estate assets, Mayoras said.
But for the average person, is a will necessary? Yes, says Mayoras. Spouses from other marriages can reappear, and even if your siblings don't have any disputes when you're alive, a will can bring out rivalries over mundane things such as who gets what furniture. You don't have to be Michael Jackson to have a will contested.
And you don't have to be rich to need one. Owning a house or having children is a good time to start a will, she said.
A will should be updated every two to five years, or as your financial situation changes, which will add a few hundred dollars to the cost of having a will. A trust should be updated just as often, and while setting up a trust can cost about $2,000, the fees can range from $500 to tens of thousands of dollars, Mayoras said.
To save money, many people might go to websites such as Legalzoom, where a will can be set up for as little as $69. While not familiar with Legalzoom, Mayoras recommends avoiding such sites and having a discussion in person with an estate lawyer because many issues can come up in an in-person discussion.
"If you're not meeting with the attorney in person, I'm concerned," she said.
Beyond updating the will every few years, she recommends keeping it in in fireproof save or safe deposit box, and telling your loved ones where it and other important documents are stored. She also recommends telling your lawyer, CPA, spouse and other contact people the online passwords to your investment and other related accounts so they can gather that information after you've died.
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