The Price of Cheap Legal Advice
I was recently at a networking event where one of the participants asked the room if they had any recommendations for cheap legal advice. A few online services were mentioned, and thoughtful feedback was given on when those services could work well. What wasn't mentioned, however, was the price of using cheap legal advice, which may not feel very tangible up front but often has to be paid eventually. Like so many other things in life, when it comes to legal advice – you get what you pay for.
One of the most common areas we see this play out is estate planning. Estate planning has a considerable up-front cost ranging anywhere from several thousand dollars to tens of thousands, depending on the complexity of your needs and location. This cost is further compounded if you move often since trust law is governed at the state level, and trusts need to be updated based on the state you reside in. Further, if you have many life changes, you may also encounter additional legal costs in keeping your estate plan in good standing. However, when you consider the costs of not doing your planning right, the up-front fees become much more palatable.
At that conference, I met several advisors who shared experiences with clients who failed to set up their estates appropriately. The legal fees in the aftermath soared into the hundreds of thousands of dollars because it's much harder to fix something wrong that has been patched over for years than it is to make sure it's done right the first time. Even simple mistakes, like not having assets appropriately titled, can lead to frustrating headaches when an estate is being wrapped up. We've seen plenty of trusts that name individuals as executors or successors trustees who no longer have a relationship with the person who established the trust. This creates chaos in the aftermath when the courts are trying to figure out whom to contact regarding the directives in the trust. Instead, we recommend a few tips for making sure you don't get caught with a costly legal bill later on.
Don't skimp on the initial plan.
When getting an estate plan or contract done, take the time to find a good attorney to draw up the legal documents from the onset. Online services have their place, but it's worth finding someone knowledgeable and credible when it comes to issues that will have a meaningful impact on your life and your legacy. Ask questions and interview multiple attorneys when possible. You'll be grateful you did down the road.
Schedule regular check-ins
You don't need a new estate plan yearly, but life circumstances change. The person who was your best friend when you had your trust created ten or even 20 years ago may no longer be in your life. You may have moved or acquired additional assets since then. You may have changes to your beneficiaries. Whatever the case, it's a good idea to schedule periodic check-ups, ideally every 5 to 10 years, depending on your life's complexity, to ensure your estate plan is up-to-date. It may mean some additional billable hours for any necessary updates, but having a current plan is valuable and much more likely to yield an outcome that reflects your current values more than a previous plan might.
Review your plan in concert with other areas of impact.
One of the most common mistakes we see made is planning that happens in silos. When your tax plan, estate plan, and financial plan are each done by separate people without any consideration for other plans, they can work against each other. Instead, review your estate plan in conjunction with your other plans. Identify any issues counter to one another and work to resolve those issues. You don't want to spend the money to put together a great plan only to have it not pan out because another plan commandeers some aspect of it.
If you'd like to dive deeper into an existing plan, our firm offers an estate planning review service that visually charts out your most recent estate choices. If you'd like to learn more about the offering and how it can complement other areas of your financial situation, please don't hesitate to reach out.