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.

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.

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.

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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

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How to Change a Living Trust After the First Spouse's Death

If you and your spouse created a revocable living trust, you can change all or part of the trust after your spouse's death. A traditional living trust allows you to change the terms by creating an amendment or making a new trust agreement. If you have an "A-B" trust, your trust splits in two at your spouse's death and you can't change your spouse's part of the trust. Your part is the survivor's trust and your spouse's part is the bypass trust. Your original trust agreement already contains the terms for both the survivor's trust and the bypass trust. You can change the survivor's trust as you would a traditional living trust until your death.

A Comparison of a Living Trust to a Last Will

Both living trusts and wills are useful estate planning tools, but you must decide which option is best for you and your loved ones. A will is a listing of your final wishes and is used to settle your estate after you die, while a living trust is effective while you are still alive.

How to Sign Documents As a Successor Trustee of a Living Trust

A living trust is a common document in estate planning that provides for an orderly transfer of property without having to go through the time and expense of probate court. One important aspect of the living trust is naming a successor trustee – the person who will be responsible for transferring the trust assets when the person who made the trust dies. If you are named as a successor trustee, you must perform the task of taking title to the trust assets and ensuring that the property is properly distributed to the trust beneficiaries. This task requires knowing how to sign trust-related documents.

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