In this interview, Brian Spitz and real estate lawyer, David Munson, discuss estate planning options. To find out more about these options and how to move forward with your own planning, watch the interview now!
Brian: Hello. I’m Brian Spitz, president of Big State Home Buyers. And I am here today with David Munson, who is a lawyer who specializes in trusts and wills and estates. And we wanted to talk a little bit about some of the various estate planning options and how you can buy and sell a house in an estate.
So, thanks very much for coming to be with us today.
David: Thank you for having me.
(0:00:56.5) Options for Estate Planning
Brian: Sure. So, tell us a little bit about some of the various options for estate planning.
David: Sure. The various options for estate planning are everybody who is alive and who is an adult should have, while they’re living, powers of attorney. They should have a Durable Power of Attorney, which is basically your financial power of attorney. And they should have a Medical Power of Attorney, one to help make medical decisions and care for somebody.
If you don’t have those powers of attorney, the option is going to be a guardianship, which the court would then be involved and your loved ones in your life, and it definitely costs a lot more than having a power of attorney.
Once a person passes away, prior to doing that, everybody should either have a will or a trust or both. What that allows is that, again, it allows the people that are in charge of your estate or in charge of your trust, to be able to handle your financial affairs and your estate affairs, with less court involvement, less restrictions.
It allows for a clear and simple transition.
(0:02:03.9) Cost for Will and Power of Attorney and Process for a Will
Brian: Right. And so, just tell us again, about what does it cost to do a will and powers of attorney, medical powers of attorney? Roughly, what do you charge for someone to come in and do that?
David: Well, what a person should expect to pay, I’m not necessarily going to say what I charge somebody, just because what I charge somebody is even less than the amount that I would say. But what a person should expect to pay, if, let’s say they’re a couple, husband and wife, they come in, their estate value if less than $5 million. They should be able to get wills, powers of attorney, for $750 or less.
Generally, what happens is you may start out initially, if it’s an attorney that’s a little more traditional, you’ll sit down with that attorney and they’ll go over their questionnaire and things with you, so they have the information on who you’d like to appoint.
Then you’ll leave and eventually, you’ll get your drafts in the mail. You review them with your spouse and you go over and make sure everything’s there. And after that, you’ll sit down eventually and you’ll sign off on those documents.
The value of the documents, and I’m sure you can attest to this, are worth far more than the $750 or less that you may end up paying for those documents.
Again, if it’s an individual, it’s the same process, but the cost is going to be a little bit more than half, because it still requires the same amount of attorney time.
(0:03:20.4) Cost for a Guardianship
Brian: Right. So that’s kind of the point I was going to make. What does it cost to get a guardianship?
David: Oh, okay. That’s easy. The cost of a guardianship at minimal is going to be about $3,500 at a minimum.
Brian: It’s a huge job.
David: It’s a huge job.
Brian: A lot cheaper to do it up front.
David: And that’s if it’s a smooth transition. If it’s not a smooth transition, guardians can, depending on the level of challenges, and the level and the number of challenges, all it does, again, it requires attorney time that makes the cost go up.
Brian: Takes longer, too.
(0:03:52.9) Benefits of Having a Will or Trust Up Front
Brian: Right. And there’s no end to, like you said, the value of doing all this stuff up front. I mean, it’s just taking care of, nobody wants to do a will because people don’t like to think that they’re going to die. They may not want to spend the time or even the few hundred, several hundred dollars, but at Big State Home Buyers, we buy, about 70 percent of our houses come from estates. And most of them, most of the individuals do not have a will.
So that’s one of the services we provide is to clear all that up and get them ready to sell. Or refer them to attorneys like David. But it takes, it would be so much easier if they had done it up front.
David: Yes. It’ll save everybody. I mean, it’ll save everybody time and money. In a situation, like with you, you pay cash. If all the paperwork’s in place, you know that sale is going to happen easily within thirty days, as long as everything’s in place.
If things aren’t in place, you’re going to be waiting ninety to a hundred –and-eighty days just to finalize the same transaction. And, at the same time, and as you’ve seen in the past, the difference in the payout to the individuals that are left that are the heirs, that have the benefit, whether the mom’s in a nursing home or something, is going to be considerably less because of the legal fees and things that are added to the closing costs of the transaction.
Brian: Right. David, what’s your website?
David: My website is DavidAMunsonPC.com.
Brian: All right. So, I’ve worked with David. He’s a great resource for estate planning and someone to go to if you have a property you need to sell.
And you can reach us at BigStateHomeBuyers.com.
Thanks very much, David.
David: Thank you for having me.