This is the first in our series of “quick tips” posts that intend to provide some short bits of at-a-glance wisdom on various aspects of your financial life:
If you have kids or are expecting your first in the near future, you imminently need to see a lawyer to have a will and trust agreement drafted. Similar to buying term life insurance, this is not something you want to think about too often, but it’s completely irresponsible to bring a child into this world and not have plans set for a catastrophic scenario.
How to Save on Lawyer Costs
As you can imagine, getting a lawyer to draft these documents is not cheap at all. We were quoted nearly $1,000 for the set (plus an Advance Medical Directive which evidently is often prepared at the same time) which seemed incredibly expensive!
We were pointed towards the “prepaid legal” plan through my employer’s benefits program and signed up during the annual open-enrollment for medical and dental benefits. It was approximately $15 a month for this benefit, or $180 a year total.
Not only does this give you free legal services for items such as mortgage refinancing and defense of traffic tickets (see a list here), but most importantly, it covers wills, trusts and advance medical directives!
So it just cost us the $180 out of pocket for this entire set of documents, and we cancelled the benefits coverage the very next year. That was a nearly $800 savings right there! So look into it come the next open-enrollment period.
Click here to see all our posts in the Quick Tips series
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Hi Brad, new reader here, just catching up on the archives. I love all of the travel rewards posts but must say that I vehemently disagree with the advice dispensed in this article. First, with enough googling, you can probably download a trust or will form for free. And, an advanced directive should be free to fill out.
But, the biggest problem with the advice is that, without any legal expertise, you simply can’t know whether the trust or will you have set up will act as you intend, have the flexibility to grow with your personal and financial situation, and be tailored to take advantage of all probate and tax issues that will arise at the time of death. Ideally, you will want all of your assets to avoid probate, and will need help transferring all assets to be held by the trust. No pre-made legal form will be able to understand your personal desires or empower you to do anything beyond the dictates of the form.
Consider your hourly rate as a CPA. Consider, also, that upon your death and your apouse’s death, you will spend thousands of dollars in probate court. $1000 is incredibly cheap to set up a comprehensive estate plan and represents a huge savings over paying an unknown amount in the thousands to probate two estates in the future,
Hi Pauline,
Thank you for the insightful comment. I fear, based on the fact that you “vehemently disagree” with the article, that you missed the spirit of the post and instead you focused solely on the one sentence that said it “seemed incredibly expensive” at $1,000.
The spirit of the post, to which you undoubtedly agree with 99%, is that everyone who has children should have these documents in place and that you must have them prepared professionally (“you imminently need to see a lawyer…”). I never once mention setting these up yourself, nor would I ever dispense that advice because it is terrible advice.
My father and Laura’s father are both lawyers, and we have great respect for the profession. This post was intended to point out that if you can save $800+ by signing up for the ‘prepaid legal benefits’ at your work (if offered), then you should do that in order to have this set of documents prepared by a lawyer.
If you feel that the lawyers who take part in this plan are not qualified, then that’s a separate issue and I’d love for you to fill us in on that. Otherwise, I think the advice is great: Get the documents prepared professionally — as you must — but only pay $200 for them.
Thanks for your time and please respond with any feedback,
Brad
I think Brad was simply trying to raise awareness about a new benefit (not unlike medical insurance) legal insurance if you like…
It works a referral service and connects you with a local practicing firm. From there, you can get documents prepared (like the two Brad mentioned) and some negotiated rates for common filings.
I have to say for the small amount I paid, I feel like I got my money’s worth and then some. A good recommendation!
Thanks for the comment Toby — I appreciate it. I’m glad you liked the recommendation and more importantly that you signed up for the service and got some value out of it
I think it’s one of those underused benefits that many big companies offer…
In regards with legal advice and other legal processes, it’s always better to seek the help of the best professionals.
I think Brad was basically attempting to bring issues to light around another advantage (much the same as therapeutic protection) legitimate protection on the off chance that you like…
It works a referral benefit and interfaces you with a nearby rehearsing firm. From that point, you can get archives arranged (like the two Brad specified) and some arranged rates for basic filings.
I need to say for the little sum I paid, I have an inclination that I got my cash’s worth to