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How much does it cost to make a will?

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CM Law's Ultimate 50 List: Making a Will #6 How much does it cost to make a will?

Introduction

Making a will is a crucial step in ensuring that your assets are distributed according to your wishes after your death. However, many people underestimate the cost of creating a valid will, leading to incomplete or improperly executed documents that can cause significant legal challenges and financial burdens for beneficiaries. Understanding the costs involved in making a will is essential for effective estate planning. This guide explores the various factors that impact the cost of creating a will, the potential consequences of cutting corners, and a real-life case from New South Wales that illustrates the financial and emotional toll of an improperly executed will.

Factors Affecting the Cost of Making a Will

1. Complexity of the Estate

The cost of making a will can vary greatly depending on the complexity of the estate. For simple estates with straightforward asset distributions and few beneficiaries, a basic will may suffice, which can cost less. However, if the estate includes multiple properties, businesses, investments, or complex family arrangements (such as blended families), the cost of creating a will can increase significantly. More complex wills require additional time, legal expertise, and sometimes the inclusion of trusts or special provisions.

2. Professional Legal Fees

Hiring a lawyer to draft your will can be one of the most significant costs involved. Lawyers typically charge an hourly rate or a flat fee based on the complexity of the estate. In New South Wales, the cost of hiring a solicitor to create a will can range from $300 to $3,000 or more. Basic wills may cost between $300 and $500, while more complex wills, involving trusts or multiple beneficiaries, can cost upwards of $1,500. The benefits of professional legal advice include ensuring that the will complies with legal requirements, reducing the risk of disputes, and addressing specific concerns unique to your situation.

3. Do-It-Yourself (DIY) Wills

DIY will kits and online templates are available at a lower cost, often ranging from $30 to $100. However, these options come with significant risks, such as failing to meet legal requirements or not addressing all aspects of the estate adequately. DIY wills are prone to errors, ambiguities, and omissions, which can lead to disputes and potentially invalidate the will. While a DIY will may seem cost-effective initially, it can result in far greater expenses if legal challenges arise.

4. Additional Legal Services

Additional costs may arise if you require other legal services, such as creating a power of attorney, setting up a trust, or dealing with international assets. These services are typically charged separately and can add to the overall cost of estate planning.

5. Ongoing Maintenance and Updates

A will is not a one-time document; it should be reviewed and updated regularly, especially after major life events such as marriage, divorce, or the birth of a child. Updating a will can incur additional costs, depending on the complexity of the changes. Some law firms offer a package deal that includes periodic reviews, while others charge separately for each update.

Common Mistakes That Can Lead to Increased Costs

  1. Failing to Account for All Assets
    Neglecting to include all assets, such as digital assets, overseas properties, or jointly owned investments, can result in additional legal costs to resolve issues after death.

  2. Using Ambiguous Language
    Ambiguities in a will can lead to disputes among beneficiaries, requiring costly legal intervention to interpret the testator's true intentions.

  3. Improper Execution
    If a will is not properly signed and witnessed, it may be declared invalid, necessitating further legal costs to resolve the estate according to intestacy laws.

  4. Not Updating the Will
    Failing to update a will after significant life changes can result in unintended beneficiaries or assets being distributed contrary to the testator's wishes, leading to potential disputes and legal costs.

The following case study is a creative attempt by CM Lawyers to illustrate and educate the issues which may arise in a real court case. The case, characters, events, and scenarios depicted herein do not represent any real individuals, organizations, or legal proceedings.

Case Study: The Financial and Emotional Cost of an Improperly Executed Will in New South Wales

Introduction

A recent case in New South Wales illustrates the consequences of underestimating the cost of creating a proper will. The case demonstrates how cutting corners in estate planning can lead to substantial financial losses and emotional distress for the intended beneficiaries.

Case Overview

Estate of Thompson [2022] NSWSC 745: Mark Thompson, a retired architect, passed away with a will that he had created using a low-cost online template. His estate, valued at over $5 million, included several properties, an art collection, and personal investments. Unfortunately, the will failed to address certain assets adequately and did not meet the formal witnessing requirements under NSW law. This led to a costly legal battle among his three children and his second wife.

Behaviour of the Participants

The ambiguity in Mark's will quickly led to a dispute between his children from his first marriage and his second wife. His eldest son, feeling deeply aggrieved, described how he had worked closely with his father in the family business and believed he was entitled to a larger share of the estate. In court, his voice quivered with frustration as he recounted the many sacrifices he had made, expecting to be recognized in the will. The bitterness in his tone revealed the emotional toll the dispute had taken on him.

Mark's second wife, on the other hand, was left with minimal provision due to the will's inadequacies. She appeared overwhelmed and tearful, pleading with the court to acknowledge her contribution to her late husband's life and their shared assets. She described feeling betrayed and abandoned, struggling to cope with the fear of losing her home and financial security. The courtroom atmosphere was charged with raw emotion as both sides fought desperately for what they believed was their rightful inheritance.

Legal Process and Court Involvement

The Supreme Court of New South Wales was required to interpret the unclear provisions of the DIY will and determine its validity. The legal process included:

  • Multiple court hearings to clarify the ambiguous language in the will and to establish the true intentions of the deceased.

  • Engaging expert witnesses, such as handwriting analysts and financial advisors, to assess the validity of the will and value the estate's assets.

  • Protracted mediation sessions to attempt to resolve the dispute among the family members, which ultimately failed, leading to further litigation.

Financial Consequences

The legal battle over Mark’s DIY will resulted in significant financial losses to the estate. Legal fees and administrative costs totaled over $600,000, while the prolonged dispute delayed the distribution of assets, causing a further loss of $400,000 due to market depreciation and maintenance costs. The total financial impact exceeded $1 million, substantially reducing the inheritance available to the rightful beneficiaries.

Conclusion

The Estate of Thompson case highlights the dangers of cutting corners when creating a will. The use of a low-cost DIY will resulted in a costly and emotionally draining legal battle, underscoring the importance of investing in professional legal advice to ensure a valid and comprehensive estate plan.

Statistics on the Cost of Making a Will in NSW

  1. Basic Legal Fees: The average cost of hiring a solicitor to draft a simple will in NSW ranges from $300 to $500.

  2. Complex Estate Fees: For complex estates, involving multiple assets or beneficiaries, the cost of a professionally drafted will can range from $1,500 to $3,000 or more.

  3. DIY Will Kits: DIY will kits or online templates typically cost between $30 and $100, but come with significant risks.

  4. Dispute Resolution Costs: The average legal cost of resolving disputes over DIY wills in NSW is approximately $200,000.

  5. Time to Resolve Disputes: Disputed wills take, on average, 18-24 months longer to resolve than properly drafted wills.

  6. Probate Application Costs: The filing fee for probate applications in NSW varies based on the estate's value, ranging from $1,000 to over $4,000.

  7. Estate Depreciation Due to Disputes: Estates with disputed wills typically lose 20-30% of their value due to legal costs and delays.

  8. Executor Fees: Executors may charge a fee for their services, typically around 1-5% of the estate's value, depending on complexity.

  9. Digital Asset Management: Less than 20% of wills in NSW account for digital assets, which may require additional legal fees to manage.

  10. Updating Costs: Updating a will can cost between $200 and $1,000, depending on the extent of the changes required.

Essential Resources: Government and Non-Profit Organizations

Government Resources:

Non-Profit Organizations: