How Much Does Estate Planning Cost?

Estate planning is an essential process that helps ensure your assets are distributed according to your wishes after your death and that your loved ones are taken care of. However, many people are unsure about the costs involved in estate planning and whether it’s an affordable option for them.



In this blog, we’ll explore the different factors that influence the cost of estate planning, the typical fees you can expect to pay, and why it’s a worthwhile investment for protecting your family and assets.

What Affects the Cost of Estate Planning?

The cost of estate planning can vary widely depending on several factors, including the complexity of your estate, the types of documents you need, and whether you’re using a solicitor or other professional services.

Here are some key factors that affect the cost:

• Complexity of Your Estate: If you have multiple properties, investments, or business interests, your estate will be more complex to plan, increasing the overall cost.

• Number of Documents Required: A simple will is cheaper than a more comprehensive estate plan that includes trusts, Lasting Power of Attorney (LPA), and inheritance tax (IHT) planning.

• Professional Fees: The fees charged by solicitors, financial advisers, or estate planners will vary. Solicitors typically charge either a fixed fee or an hourly rate, depending on the service.

• Location: Estate planning costs may also differ based on where you live in the UK, with fees typically being higher in major cities like London.

• Ongoing Support: If you choose to regularly update your estate plan or require ongoing advice, these services will incur additional fees.

Typical Costs of Estate Planning Services

Let’s break down the typical costs associated with some of the most common estate planning services:

1. Wills

A will is the most basic component of estate planning. It outlines how your assets will be distributed and who will take care of any minor children.

• Simple Will: £150 to £300
• Complex Will: £300 to £600
  A complex will might include provisions for multiple beneficiaries, trusts, or special arrangements for your business or property.

Some solicitors offer mirror wills for couples, which are two nearly identical wills reflecting each other’s wishes. These are often discounted if purchased together, typically costing between £250 and £500.

2. Trusts

Setting up a trust is a more involved process, but it can offer tax benefits and protection for your assets. Trusts are often used to ensure that certain assets are held for beneficiaries, such as children or vulnerable adults, and are passed on according to your specific instructions.

• Bare Trusts: £500 to £1,500
  A straightforward trust where the beneficiary has an absolute right to the assets.
• Discretionary Trusts: £1,000 to £3,000+

More complex trusts where trustees have the discretion over how and when to distribute assets.

The cost of setting up a trust can vary significantly depending on the complexity of your estate and the type of trust you need.

3. Lasting Power of Attorney (LPA)

An LPA allows you to appoint someone to make decisions on your behalf if you lose mental capacity. There are two types of LPAs: one for Property and Financial Affairs and another for Health and Welfare.

• Cost of LPA Registration: £82 per LPA (set by the government)

In addition to the registration fee, solicitors typically charge between £150 and £300 per LPA to set up the documents.

If you require both types of LPA, you should expect to pay around £300 to £600 for a solicitor’s help, plus registration fees.

4. Inheritance Tax (IHT) Planning

If your estate is large enough to be subject to inheritance tax, you may need professional advice to reduce the tax burden on your estate. IHT planning can include a range of services, such as gifting strategies, setting up trusts, or transferring assets.

• IHT Planning Fees: £500 to £3,000+
  

The cost of IHT planning depends on the complexity of your estate and the measures required to reduce the tax liability.

5. Probate and Estate Administration

After someone passes away, their estate must go through probate—the legal process of administering the estate and distributing the assets to the beneficiaries. While probate is a separate process from estate planning, it’s worth noting that probate fees can also affect your estate planning budget.

• Probate Fees: £1,000 to £5,000+

The cost of probate varies depending on the size of the estate and the complexity of the assets involved.

DIY Estate Planning vs. Using a Solicitor

Some people opt for DIY estate planning by using online will-writing services or preparing their own documents. While this can be a more affordable option, there are risks involved:

• DIY Wills: £20 to £100
  Online will-writing services can range from a low-cost £20 for basic wills to more tailored options that cost upwards of £100.

However, DIY estate planning often lacks the thoroughness and legal oversight of working with a professional solicitor.

Errors in the documents, misunderstandings of legal requirements, or failure to account for complex family or financial situations can lead to costly disputes or complications for your loved ones.

Using a qualified solicitor provides the reassurance that your estate plan is legally sound and tailored to your personal circumstances. While it may be more expensive upfront, the long-term benefits often outweigh the costs.

Is Estate Planning Worth the Cost?

Yes, estate planning is a worthwhile investment for anyone looking to protect their family and ensure their wishes are carried out after their death. While costs can vary, having a solid estate plan in place offers several benefits:

• Peace of Mind: You’ll have confidence that your assets will be distributed according to your wishes and that your loved ones will be provided for.

• Tax Efficiency: Professional advice can help reduce the amount of inheritance tax payable, potentially saving your estate significant sums of money.

• Avoiding Disputes: A clear and legally valid estate plan can reduce the risk of family disputes and challenges to your will.

• Protection During Incapacity: By setting up LPAs, you ensure that someone you trust will manage your affairs if you become unable to do so.

The Cost of Updating an Estate Plan

Why Updating an Estate Plan is Important

Estate planning is not a one-time event; it needs to evolve as your life changes. Major life events such as marriage, divorce, the birth of a child, or the acquisition of significant assets should trigger a review and potential update of your estate plan. Failing to update your plan could result in outdated instructions that no longer reflect your wishes, leading to complications for your beneficiaries.

How Much Does It Cost to Update an Estate Plan?

Updating a will or trust typically costs between £100 and £500, depending on the complexity of the changes. Minor amendments, like changing an executor or adding a new beneficiary, are usually more affordable. However, significant revisions—such as restructuring trusts or incorporating new assets—may require more detailed legal advice, leading to higher fees.

When Should You Update Your Estate Plan?

It’s a good idea to review your estate plan every 3 to 5 years or after any major life events. Keeping your estate plan up to date ensures it remains relevant and aligned with your current financial and family situation, reducing the risk of disputes or unintended outcomes.

Estate Planning for Business Owners

The Importance of Business Estate Planning

For business owners, estate planning isn’t just about personal assets—it’s about protecting your business interests and ensuring the smooth transition of ownership. Whether you intend to pass the business to family members, sell it, or wind it down, planning ahead can prevent unnecessary legal and financial challenges for your heirs or employees.

How Much Does Business Estate Planning Cost?

Business estate planning can be more expensive due to the complexity of managing and transferring business assets. Typical costs range from £1,500 to £5,000, depending on the size and structure of your business. This fee generally includes drafting a Business Will, setting up trusts, and ensuring a clear succession plan is in place.

Key Considerations for Business Owners

Business estate planning may involve additional elements such as:

• Succession Planning: Deciding who will take over the business or whether it will be sold.
• Tax Planning: Minimising inheritance tax liabilities related to business assets.
• Shareholder Agreements: Ensuring any co-owners have agreed-upon terms for what happens if you pass away.

Working with a solicitor experienced in business estate planning is essential to protect your business and ensure a smooth transition.

The Role and Cost of Executors in Estate Planning

What Does an Executor Do?

An executor is the person or entity responsible for administering your estate after you pass away. Their duties include ensuring that your wishes are carried out, your debts are settled, and your assets are distributed according to your will. Executors must also handle the legal paperwork and manage probate.

Should You Appoint a Professional Executor?

Many people appoint a trusted family member or friend as their executor, but it’s also common to appoint a professional, such as a solicitor or accountant, especially for larger or more complex estates. While family members may act as executors for no charge, professional executors typically charge a fee.

How Much Do Professional Executors Charge?

The fee for a professional executor usually ranges from 1% to 5% of the estate’s value, depending on the complexity of the estate and the services required. For example, a solicitor might charge 2% of the estate’s value, which could amount to £10,000 for a £500,000 estate. While this may seem expensive, professional executors offer expertise in navigating complex legal and tax issues, which can save your beneficiaries time and stress.

Inheritance Tax (IHT) Planning for High-Net-Worth Individuals

Why IHT Planning is Crucial for High-Net-Worth Estates

If your estate exceeds the inheritance tax threshold of £325,000, any amount over this threshold is subject to a 40% tax. High-net-worth individuals with substantial assets—including property, businesses, and investments—can face significant tax liabilities. Proper inheritance tax (IHT) planning is essential to reduce or even eliminate this tax burden, allowing more of your estate to pass to your heirs.

How Much Does IHT Planning Cost?

IHT planning fees typically range from £3,000 to £10,000 or more, depending on the complexity of your estate and the strategies required. IHT planning often involves:

• Gifting Strategies: Transferring wealth to family members while you are still alive.
• Trusts: Using trusts to hold assets in a tax-efficient manner.
• Business Relief: Applying for tax relief on certain business assets.

While the initial cost of IHT planning may seem high, the potential tax savings can far outweigh the expense, particularly for large estates.

Common IHT Planning Strategies

Some of the most common IHT planning strategies include:

• Gifting: You can gift up to £3,000 per year tax-free, and larger gifts may be exempt if you survive for seven years after making them.
• Trusts: Setting up a trust allows you to pass on wealth while retaining some control over how it is managed and distributed.
• Life Insurance: Life insurance policies can be set up to cover your inheritance tax liability, ensuring that your beneficiaries won’t be left with large tax bills.

Estate Planning for Blended Families

The Unique Challenges of Estate Planning for Blended Families

Blended families—where one or both partners have children from previous relationships—often face more complex estate planning challenges. Ensuring that both your spouse and your children from previous relationships are provided for can be a delicate balancing act. Without a well-crafted estate plan, disputes may arise between different family members.

How Much Does Estate Planning for Blended Families Cost?

Because of the added complexity, estate planning for blended families can cost between £1,500 and £3,000 or more. This includes drafting detailed wills, setting up trusts, and managing the division of assets between multiple parties.

Key Strategies for Blended Family Estate Planning

Some strategies that can help ensure a fair and equitable distribution of assets in blended families include:

• Life Interest Trusts: These trusts allow your surviving spouse to live in a property or use assets for their lifetime, after which the remaining assets pass to your children.
• Discretionary Trusts: These trusts give trustees flexibility in how and when assets are distributed, helping to address the changing needs of beneficiaries.
• Mutual Wills: A mutual will ensures that neither spouse can change their will after the first spouse passes away, providing peace of mind that your wishes will be respected.

Blended family estate planning requires careful thought and consultation with an experienced solicitor to avoid potential conflicts and ensure all family members are protected.



Conclusion

The cost of estate planning depends on the complexity of your estate and the services you require, but it’s an investment that offers security and peace of mind for you and your loved ones. Whether you need a simple will or a comprehensive estate plan with trusts, LPAs, and tax planning, working with a solicitor ensures that your plan is legally valid and optimised to suit your needs.

If you’re ready to start planning your estate or need a personalised quote, get in touch with our expert team today.