How to price an estate-planning service

A firm that has taken its first households through estate planning has a cost it did not have before: the meetings, the questionnaire sittings, the follow-up on funding requests, and the annual review. The firm then has to decide what to charge, what to call the work on the engagement letter and the invoice, and what to disclose. Those are one decision, because the description of the service has to be accurate in all three places, and the description is also where the firm records which side of the practice-of-law line it stayed on.

This article compares the ways firms charge, sets out what an advisor can describe on a bill and what it cannot, summarizes the disclosure and recordkeeping rules that apply to a registered adviser’s fees, explains why the attorney’s fee stays separate, and gives an illustrative budget with its assumptions in the open.

Four ways to charge

Including the coordination in the advisory fee is workable, with two cautions. The scope still has to be written down, so that staff know what the firm has undertaken and the household knows what to expect. And the hours have to be tracked even when nothing is invoiced, because a firm that does not know what a household costs to take through estate planning cannot decide whether to keep including it.

A project fee makes the service visible and needs a defined endpoint. “Three meetings, the questionnaire sittings, coordination of signing, and follow-up on the funding requests through the first review” is a scope a household can hold the firm to. “Complete your estate plan” is not, because completion depends on institutions and, for some households, on counsel. The fee should say what happens in both cases. The same goes for the retainer: a recurring charge needs recurring deliverables, such as an inventory refresh, confirmation of the beneficiary designations on file, and coordination with counsel after a life event, and it has to be distinguished from review work the advisory fee already covers.

A hybrid is possible: a project fee at engagement and a retainer afterward, or the coordination included in the advisory fee with attorney review and deed recording paid by the household as they occur or covered by the firm. Whatever the shape, it has to fit the firm’s existing fee disclosures.

What the line items can say

An advisor can charge for coordinating estate planning. An advisor cannot charge for practicing law, and the engagement letter and the invoice are where a firm describes, in writing, what it held itself out as providing. A line that reads “trust drafting” or “estate plan preparation” describes legal work, whatever actually happened in the meeting. The UPL gray zone for financial advisors sets out where the line falls; the table below sorts what a firm can identify on a bill.

The wording matters because these are the two documents a household can produce. A household that later disputes an outcome hands over the engagement letter and the last invoice, and both were written by the firm. If an activity requires a lawyer, calling it coordination on the invoice does not change who had to perform it, and a well-worded invoice for work that crossed the line records the crossing.

What a registered adviser has to disclose

For an adviser registered with the SEC, a new fee for a service that is part of its advisory business is a brochure question; a firm that runs the coordination as a separate business discloses it elsewhere, and where it lands is for the firm’s compliance officer to decide. Form ADV Part 2A asks the adviser to describe the types of advisory services it offers, and “if you hold yourself out as specializing in a particular type of advisory service, such as financial planning,” to explain that service in greater detail (Item 4.B). Item 5 then asks the adviser to “describe how you are compensated for your advisory services,” provide the fee schedule, and disclose whether fees are negotiable (5.A); to say whether fees are deducted from client assets or billed, and how often (5.B); to “describe any other types of fees or expenses clients may pay in connection with your advisory services” (5.C); and, where clients may or must pay in advance, to explain how a client obtains a refund of a prepaid fee if the contract ends early (5.D). A project fee collected at engagement and a retainer billed in advance both raise the last item.

The brochure has to reach the client “before or at the time you enter into an investment advisory contract with that client” (17 CFR 275.204-3(b)(1)), and, in any year with material changes, an updated brochure or a summary of the changes within 120 days after the fiscal year ends. The general instructions also remind advisers that, as fiduciaries, they may have to disclose more than the form’s items require. State-registered advisers follow their state’s version of these rules.

Where the service is offered as part of an SEC-registered adviser’s advisory services with regard to securities, the adviser marketing rule applies, and it bars an advertisement that discusses potential benefits “without providing fair and balanced treatment of any material risks or material limitations” (17 CFR 275.206(4)-1(a)(4)). For an estate-planning service, one such limitation is that the firm does not give legal advice and that documents are prepared from the household’s own answers, so that sentence belongs beside the benefits.

The records rule for SEC-registered advisers then keeps the paper: “all bills or statements (or copies thereof), paid or unpaid” relating to the advisory business (17 CFR 275.204-2(a)(5)), all written agreements with clients or relating to the business ((a)(10)), and the brochures delivered, for not less than five years from the end of the fiscal year of the last entry ((e)(1)). Where the estate-planning service is part of the advisory business, its engagement letter and invoices are inside that rule.

Why the attorney’s fee stays separate

When a household engages an attorney, whether for review of a flagged document or for its own counsel, the attorney’s fee is the attorney’s. The rules that keep it separate sit mostly on the lawyer’s side. ABA Model Rule 5.4(a) provides that “a lawyer or law firm shall not share legal fees with a nonlawyer,” with narrow exceptions that do not reach an advisory firm, and Rule 5.4(c) bars a lawyer from letting a person who “recommends, employs, or pays the lawyer to render legal services for another” direct the lawyer’s professional judgment. Rule 7.2(b) provides that a lawyer “shall not compensate, give or promise anything of value to a person for recommending the lawyer’s services”; among its exceptions are a reciprocal referral arrangement with a nonlawyer professional, allowed only where it is not exclusive and the client is informed of the existence and nature of the agreement, and nominal gifts of appreciation. Those are model rules, binding only to the extent a state has adopted them, and state versions differ.

The adviser’s own brochure has the matching items. Item 14.A asks the adviser to describe any economic benefit a non-client provides for advising clients and the conflicts it creates, and Item 14.B asks it to describe any arrangement under which it compensates someone outside the firm for client referrals. For an SEC-registered adviser, the marketing rule treats a compensated referral to the adviser as an endorsement with its own disclosure conditions, and a written agreement above a de minimis amount. None of these rules bars someone other than the client from paying a lawyer’s fee; they bar the lawyer from sharing it with a nonlawyer, bar payment for referrals, and bar a payer from directing the lawyer’s judgment. So the attorney’s fee is identified separately from the firm’s own charges, the firm takes no share of it and pays nothing for referrals in either direction, and where the firm covers a review fee for a household it does so as a payer that does not direct the attorney’s work, with the arrangement disclosed.

An illustrative budget

The following is a hypothetical budget for one year, not a benchmark or a forecast. It assumes one advisor on the Growth plan billed annually, 20 households taken through a project engagement at $2,000 each, and 40 other households on an annual review at $500 each. The fee figures were chosen for the arithmetic, not observed anywhere. Replace every figure with the firm’s own.

The balance is not profit. Staff time comes out first, and if the firm has not measured it, the figure has to come from the firm’s own records of hours per household, including the households that stall and the funding requests that need a second and third follow-up. Add-on services the firm chooses to cover for households, payment processing, insurance, and refunds under the prepaid-fee policy come out next. The budget also assumes the fees are permitted under the firm’s registration, disclosed as above, and collected.

Keep retention out of this table. Assets that stay with the firm after a family transition produce advisory fees, and a firm that coordinated the parents’ estate plan may be better placed to keep them, but the causal claim is hard to support and the operating budget should not depend on it. Record the transitions as they happen: which beneficiaries stayed, which left, and what the firm had done for the family beforehand. How to run an estate-planning pilot sets out how to measure completion and workload on a small group before the service is priced for the whole book.

How Bancroft handles it

The platform cost is a subscription, listed on the billing and plans page, with no per-document charge for generating documents on any plan. Restating a trust is free on every plan, so a household that changes its mind does not generate a charge the firm has to pass through or absorb.

The separately priced services are the ones that involve a third party or a physical deliverable: deed recording at $199, attorney review of a flagged document at $299, and printed documents at $25 each or $199 for a bound set. Each is paid by the household at the point of service, or covered by the firm from its stored card, in which case the household is shown that the firm covers it. A firm can turn coverage on per service. A service credit on the household’s account, where one applies, is used before its card is charged, and the firm chooses whether its coverage or the credit is used first.

The platform does not set, bill, or collect the firm’s own professional fee. The firm’s terms with Bancroft bar line items that suggest the firm performed legal services, and give accurate descriptions such as “estate planning education and consultation,” “questionnaire facilitation,” “document workflow coordination,” and “annual estate planning review and maintenance” as examples. To see the coverage toggles and what a household is shown at checkout, book a demo.