Can Estate Planning Fees Be Deducted On Your Taxes?

When people start thinking about wills, trusts, and estate planning, one of the first practical questions they ask is:

“Are estate planning fees tax-deductible?”

The honest answer is: it depends on the type of work being done, how the law currently treats those expenses, and your overall tax situation. While some planning-related costs have historically been deductible, recent tax law changes significantly limit what most individuals can claim.

This article explains how deductibility generally works, what might qualify in certain situations, and why you should always coordinate with a tax professional before assuming any deduction.

Note: This post is for informational purposes only and is not tax advice. Always consult your CPA or tax advisor about your specific situation.

What Counts As “Estate Planning Fees”?

“Estate planning fees” is a broad label that can cover many professional services, including:

• Drafting or updating a Last Will and Testament

• Creating and funding revocable or irrevocable trusts

• Preparing Powers of Attorney and health care directives

• Reviewing beneficiary designations on retirement accounts and life insurance

• Structuring ownership of real estate or business interests

• Coordinating with your financial advisor and CPA on tax and inheritance issues

From a tax perspective, the IRS generally looks at what the fee is for, not just the label on the invoice.

How Estate Planning Fees Were Traditionally Treated For Tax Purposes

For many years, some types of legal and professional fees related to estate planning could be treated as “miscellaneous itemized deductions” on Schedule A if:

• They were paid for tax planning or income-producing purposes, and

• They exceeded a certain percentage of the taxpayer’s adjusted gross income (AGI), and

• The taxpayer itemized deductions instead of taking the standard deduction.

These rules were always technical, but there was at least a pathway for certain planning fees (especially those tied to income-producing assets or tax advice) to be deductible.

The Big Change: The Tax Cuts and Jobs Act (TCJA)

The Tax Cuts and Jobs Act (TCJA), which took effect in 2018, suspended many types of miscellaneous itemized deductions for individuals through at least 2025.

That suspension includes many professional fees that used to potentially qualify, such as:

• Investment management fees

• Certain legal, accounting, and tax planning fees that fell into the “miscellaneous itemized” category

As a result, most individuals can no longer deduct many of the estate planning-related fees that might have previously qualified as miscellaneous itemized deductions.

In plain language:

For many taxpayers, the ability to deduct common estate planning fees is currently very limited or unavailable under federal law.

Personal vs. Income-Related Estate Planning Fees

Even before TCJA, there was a key distinction:

• Personal estate planning costs

  • Drafting a will

  • Naming guardians for children

  • Choosing who receives your home, car, or personal property

  • These were generally considered personal, non-deductible expenses.

• Income or tax-related planning costs

  • Structuring trusts for income-producing assets

  • Planning around estate, gift, or generation-skipping tax

  • Legal work is clearly tied to managing or producing taxable income

  • These sometimes had a basis for partial deductibility, subject to strict rules.

Today, with miscellaneous itemized deductions suspended for many individuals, even the income-related portion of fees is often not deductible on a personal return.

However, that doesn’t mean every planning-related fee is automatically non-deductible in every context.

When Estate Planning-Related Fees May Still Be Deductible

There are limited circumstances where certain fees may still be deductible, especially outside of your personal Form 1040.

A few examples to discuss with your tax advisor:

1. Fees Paid By An Estate Or Trust

After someone passes away, the estate or a trust may incur legal and accounting fees to:

• Administer the estate or trust

• File necessary estate or income tax returns

• Manage or preserve income-producing property

Some of those fees may still be deductible at the estate or trust level, subject to the IRS rules that apply to fiduciary income tax returns and estate tax returns. The rules for estates and trusts differ from those for individuals.

2. Fees Connected To A Business Entity

If part of your planning involves:

• A family-owned LLC or corporation

• Business succession planning

• Restructuring ownership interests for a closely held business

Portions of legal and professional fees directly tied to operating or restructuring a business may be treated differently from purely personal expenses. In those situations, some costs may be deductible to the company itself if they satisfy the IRS criteria for ordinary and necessary business expenses.

3. State Law Variations

Federal law drives most deductions, but state tax laws can differ. Some states conform fully to federal rules; others do not. A local tax professional can help you understand whether New York State or New York City tax rules offer any different treatment.

Practical Takeaway: Don’t Assume Your Estate Planning Fees Are Deductible

Because of the TCJA suspension of miscellaneous itemized deductions, most individuals should not assume that the cost of drafting a will, trust, or power of attorney will produce a tax deduction on their personal return.

Instead, think of estate planning fees as:

• An investment in protecting your family

• A way to avoid unnecessary court costs, disputes, and confusion later

• A strategy to help preserve what you’ve worked so hard to build

If any portion of your planning involves complex tax or business issues, it is worth asking your CPA if there are limited deductibility opportunities for those specific portions of the work.

How Kamini Fox Law, PLLC, Approaches Estate Planning And Tax Questions

At Kamini Fox, PLLC, we regularly help clients who have both estate planning goals and tax questions. Our role is to:

• Explain how New York estate planning tools (wills, trusts, powers of attorney, and more) work in real life

• Structure your plan in a way that reflects your wishes and protects your loved ones

• Identify when tax issues are involved and encourage you to involve your CPA or tax advisor

• Collaborate with your other professionals, so your legal and financial plans align

We do not prepare your tax returns, but we help ensure that your estate planning is legally sound and coordinated with your broader financial strategy.

How To Talk To Your Tax Professional About Estate Planning Fees

If you are starting or updating your estate plan, it is a good idea to ask your CPA or tax advisor:

• Are any parts of my estate planning fees potentially deductible under current law?

• If I have a trust or estate, how should fees be reported on the fiduciary return?

• If some of the work relates to my business, how should those costs be documented and invoiced?

• Are there any state-level rules that differ from the federal treatment?

Your tax advisor may want a breakdown of the services provided, which your estate planning attorney can often supply in the form of a detailed invoice.

Frequently Asked Questions About Deducting Estate Planning Fees

1. Are estate planning fees deductible on my personal federal income tax return?

For most individuals, no, not at this time. Due to the suspension of many miscellaneous itemized deductions, it is generally difficult for individuals to deduct common estate planning fees for wills, trusts, and basic planning. Always confirm with your tax professional, as rules may change and individual circumstances differ.

2. Can the estate or trust deduct legal fees after someone passes away?

In many cases, estates and trusts can deduct certain legal, accounting, and administration fees that are necessary to administer the estate or trust, subject to IRS rules for fiduciary returns. The treatment is different from an individual’s personal return and should be handled by a professional familiar with estate and trust taxation.

3. What about fees related to my family business?

If estate planning involves restructuring or advising on a business entity, some portion of the fees may qualify as ordinary and necessary business expenses for tax purposes. This depends on how the work is structured and documented, so coordination between your attorney and CPA is important.

4. Should I base my estate planning decisions on whether the fees are deductible?

Generally, no. The primary purpose of estate planning is to protect your family, reduce confusion, and ensure your wishes are honored. Any potential tax deduction is secondary. Given the current law, many individuals receive little or no immediate tax benefit from estate planning fees. However, they still gain significant long-term value from having a clear, valid plan in place.

5. Will the rules on deducting estate planning fees change in the future?

Tax laws can and do change. The current suspension of miscellaneous itemized deductions is not guaranteed to last forever. Because of this, it is wise to:

• Stay in touch with your tax professional

• Revisit your plan periodically

• Update strategies as the law evolves

Get Guidance On Your Estate Plan From A Long Island Attorney

Even if your estate planning fees are not deductible on your personal tax return, a well-designed plan can save your family time, stress, and unnecessary expense in the future.

If you live in Nassau County, Suffolk County, or the surrounding New York area and have questions about:

• Creating or updating your will or trust

• Coordinating your estate plan with your tax and financial advisors

• Planning for minor children, blended families, or complex assets

Kamini Fox Law, PLLC is here to help.

Call 516-493-9920 or contact us through the Kamini Fox Law PLLC website to schedule a consultation and discuss your estate planning options.

This article is for informational purposes only and does not constitute legal or tax advice. You should consult directly with an attorney and a qualified tax professional about your specific circumstances.