Like many large companies, my employer offers a legal plan as part of our benefits package. At open enrollment in October or November, employees can sign up for the next year. Among other things, the legal plan covers basic will and trust. I signed up for one year at the last open enrollment to take care of our simple estate planning. I’m writing down our experience in using the legal plan for this purpose for others who may be looking to do the same.
The legal plan is offered by MetLife’s Hyatt Legal Plan. It costs about $200/year. Unlike other benefits, the cost is deducted from the paychecks after tax. According to Hyatt Legal Plan, they offer the plan to employers at no cost. In other words there’s no employer subsidy.
We don’t have complex estate planning needs. I thought of doing it using software like Nolo Quicken WillMaker Plus & Living Trust. I even bought the software a few years ago. I just didn’t have the confidence to trust it completely. I decided to pay a little more to a human lawyer for the peace of mind.
The legal plan has a directory of lawyers. You can search by subject area. I found a few names nearby. Then I picked one with good reviews on Yelp. For our simple needs I figured any lawyer would be able to do it.
We made an appointment with the lawyer for an introduction meeting. After reviewing the questionnaire we filled out before the meeting, the lawyer explained her standard estate planning package:
- Will for each of us
- A joint revocable living trust for both of us (we live in a community property state)
- A trust certification, which is basically an outline of the trust
- Transfer deed to put our home under the name of the trust
- Assignment to put everything not explicitly titled to the trust under the trust
- Durable Power of Attorney for each of us
- Advance Health Care Directive for each of us
The legal plan covers everything except the Assignment, notary fees, and recording the deed. I told the lawyer we can record the deed ourselves. That saved us $100. We still paid $500 extra for the Assignment and notary fees.
The lawyer said the package would otherwise cost over $3,000. I doubt the legal plan really pays that much to the lawyer given that we only paid $200 for the legal plan and there is no employer subsidy. The extra fees for services not covered by the legal plan provide additional profits to the lawyer. The lawyer also has a chance to get future business from new customers brought by the legal plan.
After we signed the engagement letter and paid 1/2 of the agreed fee, the lawyer gave us another list of questions for how we’d like to distribute our assets after we die, who we would appoint as the successor trustee to carry out the distribution, etc. We answered those questions over email. A few weeks later we signed the documents in her office.
We finally got estate planning off our to-do list. It has stayed on our to-do list for years. If paying a moderate fee can motivate you to finish it, it’s worth it.
Could we have done the same with software? Possibly but you never know. As a one-time cost, $700 all-in isn’t too bad even though it’s 10x the cost of software.
Could we go without the revocable living trust and just title everything as Joint Tenant With Right Of Survivorship? Possibly. As I understand it, the trust will be helpful after both of us die. The benefits are marginal when one of us is still living. Because it’s part of the standard package, we just went along.
Recording The Deed
The lawyer prepared the deed to transfer our home from our own names to the trust. I wanted to record the deed ourselves to save a little bit of money and also learn the process. I looked up instructions from the county’s office. The process is very straight forward. Basically you just mail it in with a check. Two weeks later the deed came back in the mail with the official stamp.
Add Trust to Insurance
One thing I didn’t know before was that after your home is put under the name of a trust, you should add the trust to your homeowner’s insurance and your umbrella policy. I was glad I read the lawyer’s post-signing instructions.
I called the insurance companies. They were all very familiar with it. The homeowner’s policy charged a small extra premium for adding the trust as an additional insured. The umbrella insurance didn’t charge.
Funding The Trust
Putting brokerage accounts under the name of the trust was more involved. I’m covering it in part 2 of this series: Switching Brokerage Account Into A Trust: Fidelity, Vanguard, Merrill Edge.
Say No To Management Fees
If an advisor is charging you a percentage of your assets, you are paying 5-10x too much. Learn how to find an independent advisor, pay for advice, and only the advice: Find Advice-Only.