How Much Do Trusts Cost? (7 Costs Of Setting Up A Trust)

How Much Do Trusts Cost - How Much Do Trust Cost - How Much Does It Cost To Set Up A Trust - Cost To Set Up A Trust - Cost For Setting Up A Trust - Trust Set Up Cost

How much do trusts cost? 

In this article, you’ll learn about: 

  • how much a trust cost on average
  • list of costs to set up a trust
  • how much trusts cost to maintain
  • how much lawyers charge you to set up a trust 

Let’s dig in. 

Table of Contents

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How Much Do Trusts Cost?

Trusts can vary in cost depending on factors such as complexity and location. 

Basic living trusts can cost around $1,000 to $3,000. 

More complex trusts, like irrevocable trusts or special needs trusts, can range from $3,000 to $10,000+. 

Additional costs may include:

  • attorney fees
  •  document preparation
  • administrative expenses 

It’s important to consult with a trust lawyer to get an accurate estimate of the cost to set up a trust.

Read More: What Happens To An Irrevocable Trust When The Grantor Dies?

List Of Costs To Set Up A Trust

The cost of setting up a trust can vary based on:

  • the type of trust
  • estate planning complexity
  • professional services required 

Here are the common trust costs:

  • Attorney’s Fees: Hiring an experienced estate planning attorney ensures proper and legally sound trust establishment. Trust lawyer fees depend on expertise, location, and trust complexity, ranging from a few hundred to several thousand dollars.
  • Trustee Fees: If using a professional trustee, expect to pay either a percentage of the trust assets (often around 1%), hourly rates (usually $100 to $300 per hour), or flat fees.
  • Trust Registration Fees: Some areas require you to register the trust and pay fees, which can range from $50 to a few hundred dollars.
  • Appraisal Costs: Significant assets in the trust, like real estate or valuable property, may need professional appraisals, costing between $300 and $600 for a home. The cost of a trust can depend on asset complexity and number.
  • Accounting Fees: Trusts need ongoing accounting, and hiring an accountant usually costs around $150 to $400 per hour, or flat fees for specific services.
  • Transfer Costs: Moving property into the trust can incur title transfer fees of around $50 to $150, and investment account transaction fees which vary based on the institution.
  • Tax Planning And Advice: To create a tax-efficient trust, consulting a tax professional typically costs around $200 to $500 per hour, depending on complexity and local tax laws.

Consulting a trust attorney is vital to understand specific trust fund costs.

The costs of a trust vary depending on individual circumstances and regional factors.

Read More: What Is The Cost Of A Living Trust vs A Will?

How Much Does It Cost To Set Up A Trust By Type Of Trust

Let’s look at each type of trust and the costs of setting up a trust

  • Revocable Living Trust: Manages assets during your lifetime, designates beneficiaries, and avoids probate. The costs of these trusts range from $1,000 to $3,000, depending on complexity and legal fees.
  • Irrevocable Trust: Removes assets from your estate, potentially reducing estate taxes. Costs vary widely based on the complexity and assets involved, ranging from $3,000 to $10,000 or more.
  • Testamentary Trust: Created through a will, it specifies asset management and distribution after your death. Costs are typically part of overall estate planning expenses.
  • Special Needs Trust: Provides for individuals with disabilities without affecting government assistance eligibility. Costs range from $2,000 to $5,000 or more, depending on complexity and legal fees.
  • Charitable Trust: Benefits charitable organizations while potentially offering tax benefits. Costs range from $2,000 to $5,000 or more, depending on complexity.
  • Asset Protection Trust: Shields assets from creditors and legal claims, providing financial security. Costs range from $5,000 to $10,000 or more, considering complexity and legal fees.
  • Family Trust: Manages and distributes assets within a family, often with provisions for future generations. Costs typically range from $2,000 to $5,000 or more, depending on complexity.
  • Qualified Personal Residence Trust (QPRT): Reduces estate taxes by transferring a primary residence or vacation home. Costs range from $2,000 to $5,000 or more, depending on complexity and legal fees.
  • Constructive Trust: Imposed by a court to rectify property ownership disputes. Costs are typically included in litigation expenses.
  • Spendthrift Trust: Protects assets from beneficiaries’ creditors or irresponsible spending. Costs range from $2,000 to $5,000 or more, depending on complexity.
  • Generation-Skipping Trust: Transfers assets directly to grandchildren or future generations, bypassing children. Costs range from $3,000 to $7,000 or more, depending on complexity.
  • Totten Trust (Payable-on-Death Account): Creates a trust by designating beneficiaries on a bank account. Minimal or no cost involved.

Please note that these are estimated costs for setting up a trust.

The costs to set up a trust can vary based on factors such as:

  • trust attorney rates
  • where you live
  • specific circumstances

Fill out the form on this page to get an estimate of how much a trust will cost you. 

Read More: How Much Money Do You Need To Start A Trust Fund For A Child?

How Much Does It Cost To Set Up A Trust For A Child?

Setting up a trust for a child typically costs between $1,000 and $5,000 if you use an attorney. 

If you choose an online service or document preparation service, it usually costs between $200 and $500.

Read More: The Biggest Mistake Parents Make When Setting Up A Trust Fund

How Much Does It Cost To Put Your House In A Trust?

To put your house in a trust, you generally have two options: 

Hiring an attorney typically costs between $1,000 and $3,000. 

Using a document service usually costs around $200 to $400. 

If you already have a trust and just need to add a house to it, the fee ranges from $200 to $500.

Read More: How Much Does It Cost To Put Your House In A Trust?

How Much Does A Trust Cost To Maintain?

Maintaining a trust typically costs between $0 and $500 annually. 

This covers basic administrative tasks like record-keeping. 

If you have a more complicated trust, or if you hire a professional trustee, the annual maintenance cost can rise to thousands of dollars. 

A trust with assets that require active management, such as real estate, might also have higher maintenance costs.

A trustee can charge a variety of fees for managing a trust. 

The cost to maintain a trust depends on:

  • Percentage of Assets: This is common for larger trusts. The trustee might charge an annual fee of around 0.5% to 2% of the trust’s assets.
  • Flat Fee: Some trustees charge a flat annual fee, which can range from a few hundred to several thousand dollars, depending on the complexity of the trust.
  • Hourly Rate: If a trustee charges by the hour, rates can vary widely but are often between $100 and $300 per hour.

Read More: Distribution Of Irrevocable Trust Assets To Beneficiaries

Is There A Yearly Fee For A Trust?

Yes, there can be yearly fees for a trust. 

If you have a professional trustee managing the trust, they usually charge an annual fee. 

This fee can be a flat amount or a percentage of the trust’s assets, typically ranging from 0.5% to 2%. 

Additionally, trusts may have ongoing expenses such as tax preparation fees. 

However, if you manage the trust yourself, you might not have these yearly fees.

Read More: Does Your House Have To Be Paid Off To Put It In A Trust

How Much Do Lawyers Charge To Set Up A Trust?

Lawyers typically charge between $1,000 and $3,000 to set up a basic living trust. 

For more complicated trusts, they may charge $5,000 or more. 

Some lawyers charge a flat fee, while others might charge by the hour, often ranging from $200 to $400 per hour. 

Can You Set Up A Trust Without An Attorney?

Yes, you can set up a trust without an attorney

Many people use online legal document services to create trust documents. 

These services usually offer templates and guidance for a lower cost than hiring an attorney. 

You should consider using a trust lawyer to set up a trust for you in the following situations:

  • Complex Estate: If you have a large or complex estate with various types of assets, a lawyer can help you navigate the intricacies.
  • Blended Families: When there are step-children, multiple marriages, or complex family situations, a lawyer can help ensure that the trust meets your goals regarding inheritance.
  • Special Needs Beneficiaries: If you have a family member with special needs, a lawyer can help you set up a Special Needs Trust, which can be essential for preserving government benefits, like Medicaid.
  • Tax Planning: If your estate is large enough to be subject to estate taxes, a lawyer can help with tax planning strategies to minimize the tax burden.
  • Out-of-State Property: If you own property in different states, a trust lawyer can help you avoid ancillary probate in those states.
  • Business Interests: If you own a business, a lawyer can help ensure that the trust is set up to effectively manage the succession or continuation of the business.
  • Specific Requests or Conditions: If you have specific wishes or conditions you want to attach to the inheritance, like educational requirements or age restrictions, a lawyer can ensure these are legally sound and enforceable.
  • Proper Documentation: A lawyer can ensure that the trust document is drafted accurately, with all the necessary legal provisions, reducing the chances of disputes or challenges in the future.
  • Compliance with State Laws: Trust laws vary by state, and a trust lawyer will be familiar with the specific laws and regulations in your area. This is crucial for ensuring that the trust is valid and enforceable.
  • Avoiding Mistakes: Setting up a trust involves various legal formalities and procedures. A mistake, such as not properly funding the trust or neglecting to name a successor trustee, can render the trust ineffective. A lawyer can help you avoid these common pitfalls.
  • Protection from Liability: As a trustee, you have fiduciary duties and responsibilities. A trust lawyer can guide you through these duties and help you avoid actions that could expose you to legal liability.
  • Mediation and Conflict Resolution: If there are potential conflicts among beneficiaries or other interested parties, a trust lawyer can offer mediation services or advise on conflict resolution strategies.

Read More: Who Needs A Trust Instead Of A Will?

Cost To Set Up A Trust And Will Together?

Estate planning lawyers normally give you savings on the cost to set up a trust and will together. 

To set up a trust and will through an attorney, the average cost ranges from $1,500 to $4,000.

Read More: How Much Does An Estate Have To Be Worth To Go To Probate?

What Is A Trust?

A trust is a legal arrangement that lets someone, called a trustee, manage assets for the benefit of others, called beneficiaries. 

The person who creates the trust is known as the grantor or settlor. 

They put assets like money, property, or investments into the trust. 

The trustee then follows the rules set by the grantor on how to use these assets for the beneficiaries. 

For example, a parent can create a trust to manage money for their children until they are adults. 

Trusts can also help reduce taxes or protect assets. 

There are many types of trusts, each with its own specific rules and purposes.

Read More: Can I Set Up A Trust Without My Spouse?

Things To Consider When Setting Up A Trust

Here are things to consider when setting up a trust. 

  • Choose the Trust Type: Decide whether you need a revocable trust, which you can change, or an irrevocable trust, which is more permanent.
  • Select a Trustee: Pick someone trustworthy and responsible to manage the trust. This person will handle your assets.
  • List Your Assets: Include all assets you want to put in the trust, like your house, bank accounts, and investments.
  • Beneficiaries: Decide who will receive the assets in the trust when you pass away.
  • Tax Implications: Understand that trusts can affect taxes. For example, irrevocable trusts often remove assets from your taxable estate.
  • Trust Maintenance: Know that trusts need ongoing management, like yearly tax filings.
  • Funding the Trust: Make sure to legally transfer your assets into the trust. A trust without assets is just an empty document.
  • Costs: Be prepared to pay for setting up and managing the trust, including attorney or document preparation fees.
  • Legal Requirements: Ensure that the trust complies with state laws where the trust is established.
  • Successor Trustee: Choose someone to take over if the initial trustee can’t serve anymore.

Read More: Who Owns The Property In An Irrevocable Trust

FAQs About How Much Trusts Cost

Here are questions our clients ask us related to the cost of a trust. 

What Are The Disadvantages Of A Trust?

Some disadvantages of trusts are:

  • Costs Money to Set Up: Setting up a trust requires legal documents, which means you’ll likely pay attorney fees or service charges.
  • Takes Time to Establish: Creating a trust can be time-consuming, as it involves gathering documents and possibly working with a lawyer.
  • Complicated Finances: Managing a trust often means dealing with extra paperwork and financial complexities.
  • Can Be Rigid: Once you set the terms of an irrevocable trust, changing them can be difficult or impossible.
  • Potential Tax Issues: Depending on the type of trust, it may face different tax rules that could be less favorable than personal tax rates.
  • Trustee Responsibilities: Choosing a trustee is crucial, and if the trustee is not diligent, the trust’s assets could be mismanaged.
  • May Not Protect from Creditors: Some trusts do not offer protection from creditors, so assets in the trust might still be vulnerable.
  • Possible Family Conflicts: A trust can sometimes cause family disagreements or tensions if members disagree with how assets are distributed or managed.
  • Legal Challenges: If not properly set up, a trust can be challenged in court, potentially defeating its purpose.
  • Ongoing Maintenance: Trusts require ongoing maintenance and possibly annual fees, adding to their overall cost.

Read More: Do I Need A Trust To Avoid Probate

What Assets Should Not Be In A Trust?

Certain assets should not be placed in a trust:

  • Retirement Accounts: Don’t put IRAs, 401(k)s, or other retirement accounts in a trust. These have tax benefits based on their ownership, which could be disrupted if transferred to a trust.
  • Health Savings Accounts (HSAs) and Medical Savings Accounts (MSAs): Like retirement accounts, these have tax advantages tied to the owner. Putting them in a trust could affect these benefits.
  • Motor Vehicles: Adding cars or other vehicles to a trust can complicate things. For example, if there’s an accident, the trust might be liable. Also, transferring titles might not be worth the effort for assets that depreciate.
  • UTMA and UGMA Accounts: Uniform Transfer to Minors Act and Uniform Gift to Minors Act accounts are already in a custodial form and do not need to be, and typically cannot be, transferred to a trust.
  • Life Insurance: Typically, you don’t put life insurance policies in a trust. Instead, you can name the trust as the beneficiary to ensure that the proceeds are distributed according to your wishes.
  • Low-Value Items: Small personal items and belongings with low monetary value are often not worth the hassle of being placed in a trust.

By avoiding placing these assets in a trust, you can:

  • prevent potential legal or tax complications 
  • make the estate planning process more efficient

Read More: Does A Revocable Trust Become Irrevocable Upon Death

Get A Quote For The Cost To Set Up A Trust

If you want help from a trust law firm, fill out the form below. 

At The Hive Law, we understand the importance of:

  • protecting your hard-earned assets 
  • ensuring your family’s future
  • not losing everything to creditors and lawsuits
  • properly (and legally) distributing assets 

We only accommodate a limited number of clients each month.

So don’t miss your opportunity to work with our trust fund lawyers.

Benefits of our trust services:

  • Tailored solutions to fit your unique needs and goals
  • Expert guidance in navigating complex tax and legal matters
  • Preservation of your wealth for future generations
  • Streamlined asset distribution according to your wishes

Avoid the pitfalls of inadequate estate planning strategies:

  • Creditors seizing your assets
  • Lawsuits jeopardizing your family’s financial security
  • Family disputes over inheritance
  • Costly and time-consuming probate processes

Talk soon.

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