What Should Estate Planning Cost?

One of the first questions I often get asked by prospective clients is how much my services will cost. This is a fair question as fees should always be discussed at the beginning of a business relationship. Under ethical rules, an attorney’s fee should be reasonable and based on the time spent on the matter; the expertise of the attorney; and fees customarily charged for similar services in the community. Most lawyers charge fees on an hourly basis and charge for all time spent on the matter. By contrast, many estate planning lawyers prefer to charge fees on a flat or fixed fee basis. My firm has a published fee schedule available on our website or by calling our office. This fee schedule lists the fees and expenses we normally charge for most routine estate planning services, such as powers of attorney, healthcare directives, Wills and Trusts.

Are fixed fees better than hourly fees? This is a tough question but I have found that my clients prefer to know what the cost will be for the services rendered. The unknown of how much time is being spent can cause client’s anxiety, and in my opinion, can have a negative impact on my dealings with my clients. I do not want my clients to feel rushed or in a hurry to get the services done in order to reduce the costs. In estate planning, the services are more predictable and routine so fixed fees can be established based on the amount of time spent on the typical case. Our fee schedule is reviewed and updated on an annual basis. Of course you will have cases that take more time and end up being less “profitable” but in the long run, fixed fees are the most reasonable way to charge for estate planning services. It must be pointed out that many legal services cannot be charged on a fixed fee basis as there is no way to predict the amount of time the matter will take. This is usually the case with any type of lawsuit.

There are some disturbing trends I have encountered with some attorneys, including some estate planning or elder law attorneys. The first trend involves charging fees based on a percentage of the assets involved or “being protected” with said fees charged while the client is living. While percentage fees on trust and estate settlements (such as in probate) may be somewhat customary, in my opinion, charging a percentage fee to a client based on how much of their assets you are going to “protect” is not reasonable and often results in the client being taken advantage of during a vulnerable time in their life (such as when being admitted to a nursing home). Another disturbing trend involves a so-called “lifetime fee retainer”, where an attorney charges a large fee and agrees to provide for all future legal services (read the fine print as the services are limited). This type of fee arrangement does not pass the ethical requirements in my opinion as there is no way to predict the future needs of a client, and it may be difficult to ensure the attorney or law firm will be around to even provide such services.

In summary, attorney fees are a “necessary evil” as some of my clients put it. I encourage you to discuss the fees at the beginning of the matter and ask questions about other types of fee arrangements. I also encourage you to be wary of percentage fees for protecting your assets, or fees that are based on a lifetime of services.

Adam Williams is the managing partner at Farrar & Williams, PLLC, a law firm limiting its practice to trusts, estate planning, and elder law, located on the 2nd floor of the Bear State Bank building, 135 Section Line Road, Hot Springs, Arkansas, and can be reached at (501)525-4401 or at adam@farrarwilliams.com .

The firm’s website is www.farrarwilliams.com .

By: Manda Bass