Prepaid Legal Plans and Living Trusts

Coverage for Prepaid LegalWhat are prepaid legal plans? Here is a bit of information I discovered, simply by research and reading from the Internet. Initially, the plans piqued my curiosity because I’ve frequently encountered sales reps of these plans in my local area.

A prepaid legal plan asks for a small monthly premium in order to access lawyers and legal services according to their service agreement. It’s attractively priced at around $20 or less a month.

Various companies offer prepaid legal plans. For instance, as a State of California retiree, I can purchase a prepaid legal benefit.

So, are prepaid legal plans worth it? It depends.

Disclosure: As a California Legal Document Assistant (LDA), I assist people with creating their legal documents. This is self-help legal support for people who direct me on their specific paperwork. They are not represented by an attorney. I can file court documents and coordinate complicated procedures I am required to let people know that I’m not an attorney and thus cannot advise them, choose their forms or represent them in court.

What is Covered

I found this statement on the website of one of the well-known prepaid legal plans. I’ve seen similar statements of coverage on other plans with regard to estate planning.

Will preparation and annual reviews and updates. Trust preparation is available under the 25% discount.

So, here is the rub. If you are doing estate planning in California, in order to avoid probate, a “standard will” on its own might not work. If you own real estate, you will likely need a living trust. A “transfer on death” deed is another option.

You can research this topic further on the Internet (try “estate planning California”). Here is a link about the transfer on death deed that might be helpful.

As a prepaid legal plan member, you can probably get some of your estate plan documents covered. But, it is almost certain that you will have to pay attorney fees (at a 25% discount) if you are advised to create a living trust.

Bottom Line- You Pay Extra

Therefore, for certain services, a prepaid legal plan will cover you and provide what you need. Be aware of what is NOT covered. Be prepared to pay attorney fees if you want to set up a basic living trust through your plan. As an illustration, if an attorney charges $200 an hour, your 25% discounted rate would be $175 an hour.

You also won’t have a choice of attorney. The plan will direct you to the attorney of their choosing who is part of their network.

So, take the time to get your plan’s full member service contract. Read it thoroughly so you fully understand what your plan covers. Does it cover deeds (property transfers) and notary fees, for example?

Your Alternatives to Prepaid Legal

Many attorneys charge a flat fee for a basic living trust and estate plan package. Anyone with special needs, a high wealth estate or complex situations, should work with an attorney and tax adviser. Negotiate fees as possible, and seek someone through referrals who you can access locally and with whom you feel comfortable working.

As a Legal Document Assistant, I give quotes at a flat rate, and there are no surprises. I provide legal document preparation service, I don’t charge by the hour and I am registered and bonded. When an attorney’s advice is needed, I assist you to locate a “limited scope” attorney to answer your questions.

Finally, there are various “do it yourself” providers like Nolo Press or LegalZoom that offer estate planning products. They are least expensive and designed for the layperson (non-lawyer). The trick is, finishing the process and being thorough which can seem daunting, even with easy step-by-step guidance. It can be helpful to work with a live person to help expedite things.

Final Thoughts

If you do have a prepaid legal plan, at least do your basic will, durable power of attorney and any other estate plan documents that are covered in your plan. Don’t avoid taking care of your estate plan issues. A will is a bare minimum that helps those left behind after you die to carry out your wishes.

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