Safeguarding Your Family’s Future: How Much Does Estate Planning Cost in California?

Estate planning is one of the most important steps you can take to secure the future of your family. But if you’ve been avoiding essential legal planning because you’re worried about the cost of estate planning lawyer fees, you’re not alone. 

Many families in San Mateo and the greater Bay Area delay estate planning in California, worrying that the process is too costly, or they only need a simple online will. 

But how much does estate planning really cost? You’ll likely be surprised at the true cost of estate planning in California as well as what the legal process of Probate can cost without proper estate planning.

At The Law Office of Vidhya Babu, we understand the hesitancy in handling estate planning. Our aim is to help you understand the average estate planning cost in the Golden state, and show you why effective estate planning is less an expense and more a crucial investment in your family’s future. 

What Affects Estate Planning Cost in California?

We’ll start with a straightforward fact—there is no fixed price for estate planning in California. 

That is because estate planning is a highly personalized legal solution that takes into account your complete financial and family circumstances. That means there is no one-size-fits-all solution. 

The total cost of estate planning in California depends on several factors:

Your estate is the sum of all your financials and assets. The size and diversity of your assets directly impacts the complexity of legally transferring them, which is the primary driver of estate planning lawyer fees.

The complexity of an estate can be broken down into one of three general categories:

• Simple: A single individual with a few assets and a modest retirement account may only need a simple will and ancillary documents. 
• Moderate: A married couple that owns their own home, has one or more retirement accounts, and minor children may require something more complex, such as a Revocable Living Trust.
• Complex: Individuals with a high net worth, with multiple properties, business interests, or those with blended families require the most preparation and planning and will have a higher than average estate planning cost.

The Type of Document Needed

There are varying types of estate planning documents, designed to handle specific needs. 

• Final Will and Testament: The most basic estate planning document, a will is less expensive to set up but means that your assets will pass through probate or court process if your estate exceeds the small estate threshold. 
• Revocable Living Trust (RLT): Allows you to maintain full control over your estate, and can be altered or revoked at any time. Crucially, an RLT avoids probate and also provides incapacity planning. With average estate planning cost, this is the most common type of California estate plan for homeowners.
• Irrevocable Trust (IT): In this form of trust, you relinquish control of your assets, which cannot be easily changed or revoked. However, you gain asset protection from creditors as well as a potential reduction of State/Federal Estate Taxes. IRTs have a higher than average estate planning cost.
• Specialized Trust: A form of trust designed for complex needs, including advanced tax strategies, beneficiary protections, and spendthrift trusts designed to protect an inheritance from a beneficiary’s financial mismanagement.

Attorney Experience and Location

Lastly, a key factor in estate planning lawyer fees will be the expertise and skill level of the attorney, as well as the location of their practice. 

In high cost-of-living areas like the Bay Area, estate planning is likely to be higher than for those in less expensive regions. 

But it is important to consider that when you work with a skilled estate planning attorney, you’re not just purchasing a set of documents—you’re getting specific legal knowledge tailored to your family’s needs, that will guarantee your family the most favorable transfer of wealth and assets when the time comes.  

How Much Does an Estate Planning Lawyer Charge?

Considering these factors, how much does an estate planning lawyer charge? Most experienced estate planning attorneys offer their services under one of two primary fee structures:

1. Flat Fee Arrangements: These are the most common arrangements for estate planning packages. Flat fees give clients peace of mind that their needs will be handled without hidden fees or unexpected costs.
   • Wills: The average cost for a simple will can cost anywhere from $300-$1,500.
   • Revocable Living Trust: An RLT package, including setting up the trust, powers of attorney, deed transfers, and a pour-over will can range from $2,000-$5,000+.
   • Irrevocable/Specialized Trust: Those with high net worth and many assets who need a more complex Irrevocable or specialized trust can expect costs of $5,000+.
2. Hourly Rates: Many estate planning attorneys charge an hourly rate for certain services, such as trust administration after a client’s passing. More complicated tasks such as preparing amendments to an existing trust or handling will contests can reach between $300 to $800+ per hour. Some estate planning attorneys may offer basic estate planning services at an hourly rate, but it’s crucial to obtain an estimate of expected hours before committing to an hourly model.

It’s important to note that while having a trust in place helps avoid the lengthy and costly probate process, administering the trust will require some billable hours for things like transferring assets, filing necessary documents, and communicating with beneficiaries. 

Trust administration is typically billed at an hourly rate, but is almost always faster, simpler, and less expensive than probate.  

Probate: The High Price of Inadequate Estate Planning

You may view the cost of estate planning in California as an unnecessary expense. But the reality is that the difference between the cost of estate planning lawyer fees and the cost of mandatory California probate are immense. 

Let’s break it down:

When an individual passes away with a simple will (or worse, no will) with assets whose gross value exceeds the current statutory threshold of $184,500, the estate is mandated to go through the formal probate process. 

For their roles in the probate process statutory, fees paid to both the probate attorney and the Executor of the estate. These fees are fixed by California law, and are based on a percentage of the estate’s gross value—the value before deducting mortgages, taxes, or debts.

The California statutory fee schedule is as follows:

• First $100,000: 4.0%
• Next $100,000: 3.0%
• Next $800,000: 2.0%
• Next $9,000,000: 1.0%

Remember, these percentages are paid as compensation to both the Executor and the Probate Attorney, guaranteeing that a very significant portion of your estate will be paid in fees simply because your estate went through probate.  

The Cost of Probate: A Real World Example

Let’s consider an estate where the primary asset is a home valued at $1,500,000, making the gross value of the estate for fee calculations $1,500,000. 

The calculation for the Executor’s statutory fee:

• 4% on the first $100,000, equal to $4,000
• 3% on the next $100,000, equal to $3,000
• 2% on the remaining $1,300,000, equal to $26,000
• Total Executor Fee: $33,000

Doubling that amount for the Probate Attorney’s fees results in a total of $66,000 paid directly from the estate, simply for the administrative process. 

Factor in to that court filing fees, appraisal fees, publication fees for the Notice of Petition, and it all adds up to a huge amount of wasted time and money that could easily be avoided with proper estate planning. 

The Bottom Line: The Cost of Estate Planning in California is an Investment, Not an Expense

The best question to ask isn’t “how much does estate planning cost?”, but rather how much will it cost your family if you don’t plan?

For many Bay Area residents, a comprehensive Revocable Living Trust package is the ideal solution:

• An RLT bypasses the probate process entirely, immediately saving your family thousands of dollars on mandatory probate fees. 
• Your assets are available to be distributed almost immediately after your passing, eliminating the months and even years of potential waiting for the process of probate to be completed. 
• Your estate remains completely private, unlike probate, where everything is a matter of public record.

With an average estate planning cost between $3,000 to $5,000 for a professional estate planning lawyer to set up an RLT, the cost is minimal compared to the costs of probate.

Don’t let the lengthy and costly nature of probate dwindle your family’s inheritance. 

Contact the Law Offices of Vidhya Babu today for a personal estate planning consultation, and let us help you safeguard your family’s future with a customized estate plan. 

*DISCLAIMER*

This blog post is for informational purposes only and does not constitute legal advice. Please consult with an attorney to discuss your specific circumstances.