Building a trust or an estate plan is where experience counts, but that doesn’t mean you must go to a large law firm. On the contrary, some of the savviest trusts and estates attorneys have their firms or practice in small and moderate-size law firms in Arizona.
Hiring a Trusts and Estates Attorney By the Hour vs. a Flat Rate.
An average flat fee for a basic revocable trust plan may run from $2,500 to $10,000, depending on the trust’s complexity and the estate’s size. Flat fees, however, aren’t necessarily a better deal than hourly rates. Remember, the priciest lawyer isn’t necessarily the best.
Ask at the outset for the lawyer’s rate. It’s better to know upfront so that neither of you wastes the other’s time if there’s a vast discrepancy between what an attorney charges and what you’re willing to pay. Generally, the more assets a person has, the more complicated their estate is likely to be, and the more it will cost to put together a thoughtful estate plan.
Choosing The Right Trusts and Estates Attorney and Signing an Agreement.
If you feel that the attorney is a good match in terms of style, pricing, and comfort with risk, you’re ready to hire them. Expect to sign an engagement or retainer agreement that outlines what services will be provided.
In Arizona, the language in this agreement is mandated by law or the state bar association. The agreement should specify two crucial points: the duty of confidentiality and the duty of loyalty. For example, an attorney cannot keep confidence from one spouse while still fulfilling his duty of loyalty to the other spouse. To ensure that loyalty, spouses will generally be asked to waive confidentiality between themselves and the attorney.
Gathering Information to Minimize Estate Taxes.
Your trust and estate attorney will likely give you homework after signing an agreement. Most attorneys use a worksheet, up to 30 pages long, designed to help identify your goals, raise issues, and gather data on your estate. Some questions may feel intrusive, such as whether there’s any substance abuse in the family. This may, however, affect how you hold assets in trust for particular beneficiaries.
Some estate attorneys will charge an extra fee for consulting on how to help minimize estate taxes. Even though there is no Arizona estate tax, the federal estate tax may apply to your estate. The federal estate tax exemption is $12.06 million for 2022. This tax is portable for married couples. With the proper legal steps, a couple can protect up to $24.12 million when both spouses have died. Additional planning, which will include advice on minimizing or eliminating such taxes by transferring assets to an irrevocable trust, for example, can add as little as $1,000 to the legal bill while potentially saving your heirs tens of thousands of thousands of dollars, making it a worthwhile investment.
Staying Current with Estate Documents.
Some wills and revocable trusts require more than one draft. Often, this depends on how well you’ve communicated your wishes to the attorney. A revocable trust document may be as long as 40 pages. Your attorney should provide a one-page flow chart and then a five- to 10-page summary of what’s contained in the document.
Once the revocable trust and will are finalized, decide who will keep the documents and where. Next, the attorney will give you instructions on how to fund the trust by transferring assets into it and changing the title on accounts and property. Perhaps the most important thing to remember is that a will and revocable trust can be changed and modified.
Good lawyers will communicate with a trustee periodically by letter to remind him of the terms of his will and inquire whether he has any interest in making changes. Tarenaren’t trying to drum up fees; they know that circumstances change and that wills and trusts need modifying. If your lawyer doesn’t do this, you should add “review will” to your tickler file when tax time rolls around.
