Estate Planning Process for the Average Person – how does it work, what does it cost, what is involved? (North Carolina, NC)

19 Jul

The idea of estate planning is intimidating.  First of all, the word “estate” has the connotation that you have wealth, even though “estate planning” is meant for any person regardless of wealth.  It is basically planning your will, trusts, power of attorney health care wishes, etc.  Second, it is costly – we will get to that as I am not at the stage where I actually know the cost yet but I will blog that as I go.  When you google, “cost for estate planning,” nothing comes up.  When you go to a website and search for a cost you also don’t find any.  I don’t know how much it varies from person to person.  However, estate planning needs can vary a lot depending on your situation.  If you only need a will and a Health Care Power of Attorney, then you probably don’t need to see an attorney and can just do one of those online things fairly cheap.  This is what many people who can’t afford to do more or are young and not too concerned about “their time being up” will do.  Yet, as you get older and as your assets grow, it may be time to think about doing something that is more protective and substantial.

We are a married couple with 4 children in our late 40’s.  Until now, we had a boiler plate will made by an attorney through one of those plans where you pay monthly for the right to call and get advice from an attorney.  It was about $26 per month and we could call, send in documents for review and he made us a boiler plate will to fill in as well as a health care POA, and a living will.   We filled them out and had them notarized and those have been our documents up until now.

Why have we decided to do something more than just fill in the blank estate planning?

  • We are entering our 50’s soon – so we feel that as we start thinking of retirement in about 10-12 years, it is also time to be thinking about making sure our assets are fully protected should we pass away.
  • Now that we are older, we finally have more assets – this means that the thought of paying for a lawyer to do our estate planning no longer feels like we are giving up a years salary to do so and we actually have accumulated enough assets to protect.
  • We are smarter and realize that fill in the blank wills do not cover many different scenarios that we would like covered, could be a problem, and we want to make sure there are no problems for our children after we pass.
  • We have a special needs son and we knew at some time that we would need to hire someone who knew how to best protect his needs, despite that fact that we had also created a Special Needs Trust but again, not from meeting directly with an estate planning attorney.
  • We have learned that trusts can be a great way to pass assets onto heirs and want to take advantage of that for both our children and have encouraged our parents to look into trusts for passing their larger assets (like houses) to us (or into our trusts) through their own trusts.

So, if you are just starting out you need to look at what options you have and what advantages they give you.  The basics you might want to consider having are:

  • Will
  • Checking on beneficiaries and knowing that beneficiaries trump what is written in a will
  • Living Will – your own decisions about your health if you are not able to
  • Health care Power of Attorney – who can make decisions about your health if you are unable to
  • Trusts – there are different kinds but most commonly used are revocable living trusts and this is the main one I will discuss (there are also AB trusts and irrevocable trusts that can be tools used for specific purposes)
  • Long Term Care Planning – will you plan on paying out of pocket if needed, plan on using up all resources and using Medicaid (and do you know how to do that correctly), getting a Life Insurance or Annuity with a Long Term Care Rider, or buy insurance

Many of the estate planners offer a free workshop and at the workshop they teach you all of the basics about estate planning, the vocabulary, and concepts behind each of the above mentioned items, and then they plan a 1:1 meeting with clients after the workshop.  The reason for this is many people think they know about estate planning or know some pieces of a few things – i.e. having a Will and Living Will but there is so much that they don’t know about that it helps to educate people about what estate planning is all about before they start talking about their own individual situation.  I agree this is a very useful model.  I am a reader and learner so I read up on everything and knew about 85% of the information in the workshop but a) that is not the norm and b) I still learned 15% more information.  My husband knew only about 15% so he got to learn about 85% as did probably many if not most of the people there who probably don’t have “Living Trust” books on their bookshelves at home like I do.

Our workshop was 2 hours, it was a bit long but the lawyer did a good job with stories and examples that explained things and we had snacks and drinks!  She was the author of 3 books and we could choose one after attending.  Many of these attorneys have written books or co-authored books so don’t let that overly impress you, it is par for the course.  My father also went to a workshop and was “wowed” because the attorney had authored a book – I think they all have.

I won’t spend a long time here teaching you about each subject as my goal of this blog post is to discuss the PROCESS, not educate readers on what estate planning options are in detail.

After our workshop, we went home and filled out a 10 page worksheet with all sorts of information about ALL our assets, life insurance, current wills and trusts, children, and what we wanted to get out of “estate planning.”  We scheduled an appointment and I will post further after we have our meeting.




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