retirement

Attorney help crucial in estate planning

Don TaylorQuestionDear Dr. Don,
Because my husband and I have a net worth of more than $400,000 and each have $500,000, 20-year term life insurance policies, we created a will and living trust from a website of a well-known financial adviser. (She has a weekly show on CNBC.) Since then, I've read several articles mentioning that letting a pro do the paperwork could avoid any mistakes that might void the trust. I have a few questions:

  • I'm skeptical of putting all my trust (excuse the pun) into a piece of paper. Look at the McCourts' divorce. How can we ensure there won't be issues?
  • Where do I go to narrow down the search for a pro? Even if I use professional websites and interview people, how do I know I can trust them?
  • What should be the average cost of creating a will and living trust for a couple with two kids and the aforementioned assets? I live in Burbank, Calif.
-- Nancy Networth

AnswerDear Nancy,
OK, you got me to look. I consider myself fairly well-informed, but had no recollection of the McCourts' divorce issues. A quick Internet search got me up to speed. I did, however, know who you were referring to in the financial planning world -- "she who must not be named"!

If you're not comfortable with the integrity of the documents, you should have them reviewed by an attorney. Few things in this world are ironclad. The advantage of having counsel is having some recourse if the legal documents don't ensure the intended results.

I asked my "go to" person on estate planning, professor Constance Fontaine, author of "Fundamentals of Estate Planning," what she would recommend. Here's her response:

I think she should check her local bar association for local attorneys and have a free consult (and meet) with about three of them. Basically, she needs to find a firm that has a department or attorney who specializes in estate planning. The individual should not be right out of law school but someone more "seasoned" (my opinion, on that count) in the field. I'm guessing a will and living trust in Burbank, (Calif.), would be pricier than in many other areas. A guess would be a total of $1,000 to $1,500 ... again depending on the complexities that end up being involved.

You've done good work in building your combined net worth. But the estate implications at less than $1 million of combined net worth shouldn't create a planning environment so complex that you need to spend more than this in validating and or rectifying your estate planning decisions.

Thanks to Constance Fontaine, associate professor of taxation and Larry R. Pike Chair in insurance and investments at The American College in Bryn Mawr, Pa., for her assistance in answering this reader's question.

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