Hey there, time traveller!
This article was published 20/3/2012 (1724 days ago), so information in it may no longer be current.
Sam needed to prepare a new will and phoned around to find out how much it would cost. He called several lawyers. This is what he learned.
Lawyers quoted fees for the will ranging from a low of $200 to a high of $1,200. He told each lawyer the same thing: that he had assets of about $500,000 and wanted to divide his estate at his death between two children, who were both adult and living here. He also told the lawyers he wanted not just a will, but also a power of attorney and medical directive to deal with his affairs if he became too sick to do so himself. The job he described was the same, but the quoted legal fees were all over the block.
Why the big difference in price from lawyer to lawyer? Low legal fees for wills were the norm 20 or 30 years ago. Estate planning was simpler then. Lawyers often spent a mere 20 minutes with each client. They were also willing to lose money doing the will. In sales terms, it was a "loss leader." The fee for the will was irrelevant: The lawyer's objective was to open the door to handling the estate -- where the fee would be 10 or 20 times larger.
Tax and probate rules have become more complicated. Disputes over estates burn money that would otherwise go to the family. Courts have been clear during the last decade or two: Lawyers are responsible for avoiding those disputes by being very, very careful when doing wills. Even in a simple situation, a lawyer should spend a minimum of an hour or two face to face with the client.
The lower prices for "simple wills" were fixed before that became the reality, and many lawyers feel stuck with it. Some also subscribe to the view that increasing prices loses clients, losing clients loses estates, and losing estates means losing the bigger fees downstream.
The low pricing can be bad. Lawyers are human. They work harder on files that pay more. Thus, the will file can get less attention than it might deserve. That can lead to mistakes.
Other lawyers, the ones charging $1,200, have given up on the traditional business model. They align the size of the fee with the importance of the work and the time they spend. They do not count on getting the estate. The result: Many prospective clients refuse to hire them.
Some people should expect to pay even more. You might have a farm, family business or a cottage. You might be part of a blended family, have a disabled child, U.S. citizenship or have children who live in the United States. You might have a projected estate of more than $2 million or so. People in those categories can easily spend a larger amount, such as $3,000 or perhaps $10,000, on their will and other estate-plan structuring. People who fit several of those categories at once and enjoy wealth with a projected estate of more than $10 million or so, could spend as much as $20,000 or $30,000 for a good estate plan.
Does all this sound crazy? Your will is arguably the most important legal structure you will ever put in place. All of your wealth passes through it. It takes care of the people you love the most. It does that at death, a high-tax environment. Death seems to bring out bad blood, and disgruntled heirs pounce on flaws.
Viewed in that context, the higher prices are not shocking. What is shocking is this: Many people feel they have achieved a job well done if they come home with an old and dented estate plan from the legal bargain bin.
What lessons should you take away from all this? It is counterintuitive, but you may want to look for an expensive estate plan, not a cheap one. There are some areas in life where it makes sense to pay a little extra. They include good shoes, a good mattress and a good estate plan.
If you are compelled to economize, engage in careful comparison shopping. You want the right estate plan, carefully constructed, from a lawyer who takes time to get to know you and your family's needs. Some lawyers still do an exceptional job for a nominal fee.
John E.S. Poyser is a Winnipeg lawyer with the Wealth and Estate Law Group. Contact him at 947-6801 or email@example.com