Sonoma Sun ~ Eric Gullotta


Investing in your estate plan

Posted on September 18, 2014 by Eric Gullotta

One of the first questions I get when meeting with clients is, “How much is this going to cost?” I am never upset at someone asking this because it is a very valid question. Furthermore, knowing up front what an estate plan will cost is important. The antiquated pricing structures for attorneys just doesn’t work anymore (i.e. billing by the hour).  How can your family make an informed decision about making an expenditure if they don’t know how much they are spending? If you walked into Sonoma Market and asked how much a loaf of was and they replied “Go ahead and eat it first, then we’ll tell you” – you probably wouldn’t buy it.

When a client asks me how much an estate plan costs I let them know that is the wrong question to ask.  Analyzing the financial aspects of an estate plan is a good idea but the correct or at least the better question is “How much will this save me or my family?”

I think we can all agree that when it comes to investing, it is not necessarily how much the initial investment is, but rather what the return is. Think of an estate plan as an investment. I’ll explain.

Without an estate plan, your family will eventually have to pay probate fees so that your assets can legally pass to them. Based on the hard and fast rule that we will all die (at some point), this is an unavoidable expense. So, if there was a way to offset or reduce this unavoidable expense, then that would essentially be investment that matured at some point in the future, i.e. your death – an investment that is guaranteed to pay off.

If you “invest” $3,000 in an estate plan you can save your family $30,000. This is the case if you have no plan and gross (not net) assets of $1,500,000.  The $30,000 represents probate fees your children or heirs will have to pay in order for the court to distribute your assets to them (of course the fees will be more or less depending on the size of your estate). By turning $3,000 today into a savings of $30,000 in the future you are getting a 1,000% rate of return on your money. Wow, what financial advisor can guarantee that rate of return?

It should be considered an investment because by hiring an attorney to create the plan, you must give up the use of the initial “investment” of $3,000. But as in the case above, when it “matures” your family will be in better shape financially by virtue of avoiding $30,000 in costs and fees down the line by only paying $3,000 today.

Additionally, you get many other benefits by creating this plan. You’ll get documents that don’t necessarily save you money but will help avoid delays and confusion such as a power of attorney. You get documents that provide quality of care for you if you’re unable to provide your own care such as an advanced health care directive. Finally, your family gets peace of mind knowing that everything is going to go as smoothly as it can in a time typically full of chaos.

Don’t think of hiring an attorney to create your plan as “spending money” – that is what happens when you buy dinner or new clothes. Think of it as investing in your family’s future and writing your attorney and the government out of your plan. I know I like the sound of that!

Eric S. Gullotta, JD, CPA, MS (Tax) focuses on estate planning and taxation law. His office is located at 232 West Napa Street, Suite A, in Sonoma. Contact him at 938.7234 or visit


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