What is the approximate annual maintenance cost of an Estate Plan?
The simpler the estate, the fewer the costs. The more complex the estate, particularly with business entities, the maintenance cost is greater. Typical annual maintenance costs of legal planning for an estate or business will include:
For Trusts, Wills, and Basic Emergency Documents:
- Annual Safe File Document Storage Fees. This generally runs about $150/year. If you have no business entities, this may be the only cost of maintaining your estate plan.
- Updates. In general, you should review update your estate planning document any time you have a major life change, or after five years, which ever occurs first. The cost of this will depend on how extensive the update this and may range from $800-thousands.
For Business Entities:
- Registered Agent Fees. Every business entity must have a Registered Agent or Statutory Agent. This can be you in a state where you are domiciled. For entities in any state where you are not domiciled or where you do not want to get served with legal process, it is best to engage a service. In Arizona, our firm can serve as Registered Agent. Learn more here. The costs generally run about $125-$500/year depending on the level of service you require.
- State Filings & Reporting. Many states require annual reports or filings. There is typically a charge by the state. Even when not mandated, such reports are generally beneficial and a good idea for record keeping and tracking business activities. Depending on the level of services you elect to implement, the cost of this can range from $300-$1,500/entity.
- Accounting and Tax Reporting. The cost of preparing and filing tax returns and the associated accounting will vary depending on the level of business activity. Independent accounting firms will charge their own fees at their own rates.
- Due Diligence. Many states require certain business entities to hold meetings and document them with written minutes. It is also advisable to have annual or periodic resolutions affirming who has authority to act on behalf of an entity. Costs vary based on the level of service required and range from $300-$3,000 per entity.
- Updates & Upgrades: Simple entities that may be appropriate at early stages can become obsolete as businesses grow, in which case up-grading may be in order. Also, entropy applies. Order decays into chaos. Obsolescence is inevitable. Nothing lasts forever. Consequently, even with the very best of legal plans, updates are necessary. Costs vary.
- Banking and Operational Costs. Of course, business entities will have normal banking and operational costs.
Some of these items you may be able to do yourself. Most require technical or subject matter knowledge which makes it advisable to engage professional assistance.
Annual Maintenance Cost