By Steven J. Oshins, Esq., AEP (Distinguished)
The cost of the legal work will at some point become part of the up-front discussion with a prospective client.
Many such prospective clients hear how much the legal fees are and roll their eyes as though they are being suckered. I’ve had many conversations go something like this:
Prospective Client: How much does it cost?
Attorney: We charge $30,000.
Prospective Client: That much? I was quoted $5,000 by another attorney.
Attorney: That was to prepare a Revocable Trust. I’m trying to do advanced estate planning for you which should save your family at least $10 million.
Prospective Client: Oh, now I understand. Okay, let’s move forward then.
The biggest question for the prospective client is, “How much does it cost not to do the planning?”
Cost is relative. Using the dollar figure in the example above, is $30,000 out of line when you’re saving the family more than $10 million? Absolutely not! Is $30,000 out of line to buy a pack of gum? Of course it is!
The client needs to pick the right attorney: one who is knowledgeable, experienced and reasonably priced. The client must be comfortable and feel a strong connection with the attorney and feel that the attorney will listen and execute to perfection.
Whether the legal fee is $X, $Y or $Z, if the attorney is saving the family a lot of dollars in taxes and/or protecting assets from creditors and divorcing spouses, the value is there as long as the attorney meets the above qualifications.
The benefits provided to the client and client’s family should substantially outweigh the cost to obtain those benefits. It’s that simple.
It is up to the attorney to properly relay the information necessary for the client to see that value.
It’s Not What It Costs That Matters
Let’s take an example based on the fact pattern used hereinabove:
Attorney A charges $5,000 to prepare a Revocable Trust, Will and Powers of Attorney thereby saving Client roughly $20,000 of probate costs and providing continuity of management over the assets and other ancillary benefits often found with “basic planning”.
Attorney B charges $30,000 to prepare an irrevocable Dynasty Trust, assist with the transfer of non-voting LLC membership interests via gift using valuation discounts and saves Client’s family more than $10 million in estate taxes. Attorney B also prepares a Revocable Trust, Will and Powers of Attorney for Client for a similar amount as Attorney A charges for those documents.
Which is the better deal? I suppose it depends upon Client’s goals with respect to how much Client’s intended beneficiaries should receive, but most people would conclude that Attorney B gave Client the better value.
“How much does it cost to do the planning?” should be compared with “How much does it cost not to do the planning?”
If you found this article interesting, you might also be interested in these other educational programs and products by Steve Oshins:
- The Spousal Lifetime Access Trust: A Gifting and Creditor Protection Technique
- Estate Planning Techniques in a Time of Low Interest Rates
- The Installment Sale to an Intentionally Defective Grantor Trust
- The Grantor Retained Annuity Trust: Significant Estate Tax Savings with Nearly Zero Gift Tax Risk
- Steve’s FREE State Rankings Charts
ABOUT THE AUTHOR
Steven J. Oshins, Esq., AEP (Distinguished) is a member of the Law Offices of Oshins & Associates, LLC in Las Vegas, Nevada. He was inducted into the NAEPC Estate Planning Hall of Fame® in 2011. He has been named one of the 24 “Elite Estate Planning Attorneys” and the “Top Estate Planning Attorney of 2018” by The Wealth Advisor and one of the Top 100 Attorneys in Worth. He is listed in The Best Lawyers in America® which also named him Las Vegas Trusts and Estates/Tax Law Lawyer of the Year in 2012, 2015, 2016, 2018, 2020 and 2022. He can be reached at 702-341-6000, ext. 2, at firstname.lastname@example.org or at his firm’s website, www.oshins.com.