What Is the Average Cost to Prepare a Living Trust?

By Regan Rondinelli-Haberek

When considering an estate plan, many people contemplate whether a trust is necessary or a will alone is suitable. The choice is often based on cost. Depending on whether an attorney is hired, a trust can be considerably more costly than a will. The key is finding a balance between cost and creating an estate plan that fits your family’s needs.

When considering an estate plan, many people contemplate whether a trust is necessary or a will alone is suitable. The choice is often based on cost. Depending on whether an attorney is hired, a trust can be considerably more costly than a will. The key is finding a balance between cost and creating an estate plan that fits your family’s needs.

Living Trusts

A living trust is a legal entity that holds title to and manages assets for an intended beneficiary. A living trust is distinguishable from other trusts in that you, as the grantor, can make changes to the trust or revoke it entirely during your lifetime. You can also act as the initial trustee of your living trust. Living trusts are most often used to avoid the probate process that comes along with passing property through a will. Because assets are owned by the trust, and not by you, they pass by the terms of the trust upon your death, making probate unnecessary.

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Hiring an Attorney

Trusts are complicated documents and estate planning attorneys can help you navigate through the legal nuances. Attorney’s fees are generally the bulk of the cost associated with creating a trust. The cost for an attorney to draft a living trust can range from $1,000 to $1,500 for individuals and $1,200 to $2,500 for married couples. These are only estimates; legal fees vary based on the attorney and the circumstances. Rates may differ depending on the state in which you live. The cost of hiring an attorney to draft a trust can be five to six times that of drafting a will.

Living Trust as Part of an Estate Plan

If you decide that hiring an attorney is the way to go, you will likely get more for your money than just the living trust. Living trusts are most often used as part of a comprehensive estate plan that can include wills, powers of attorney and health care directives. You should find out exactly what is included in the attorney's fee prior to agreeing to any proposal. For instance, is the cost of drafting a new deed to add real property to the trust included in the price? Does the attorney's fee include retitling of assets?

Titling Assets to the Trust

In order to pass through the trust and avoid probate, assets must be retitled into the name of the trust. For instance, if you want to place your home in the trust, you must change the deed so that the trust is named as owner. Once the deed is changed, it should be recorded with the registrar of deeds, and is subject to the same fees as any real estate transaction. These fees vary by state. You can check with your local registrar of deeds for your state’s fees associated with a deed transfer. Whether or not you choose to hire an attorney to draft your living trust, you will be responsible for the expense of titling assets to the trust.

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How to Title Assets for a Trust

References

Related articles

Can I Have Both a Living Trust & a Testamentary Trust?

Estate planning is about ensuring that your property goes to your designated beneficiaries as quickly as possible, while at the same time minimizing any estate taxes. To achieve these goals, you may need to use several different types of legal devices. Trusts are one type of device that is commonly used in estate planning. There are two types of trusts: living and testamentary. You can use both types of trusts, but it is important to understand how both types work and how the two can work together in an estate plan.

Is a Living Trust Liable or Subject to Probate?

A living trust holds assets that are managed by a trustee for intended beneficiaries. Also called a revocable trust, it differs from other trusts in that the trust creator, or grantor, can also serve as the trustee and can make changes to, or even revoke, the trust in its entirety during his lifetime. Living trusts are attractive because the grantor retains ultimate control over his assets while he is alive, but they are most commonly used to avoid probate.

Inheritances and Family Trusts

Probate can be a difficult process even with the simplest of estates and few heirs. That process can quickly become much more difficult with larger estates, children by former spouses and heirs who are unprepared for the responsibility that comes with receiving an estate’s assets. As a result, trusts with family members as beneficiaries are becoming a popular tool in estate planning. These trusts can ensure that your heirs receive the assets you want them to but in a way that protects the overall value of the property.

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