Trusts can be an intelligent way to manage your estate planning needs.
But how much does a trust cost to maintain?
Typical trust fund maintenance costs include:
- Administration fees
- Management fees
- Maintenance fees
Keep in mind that some estate planning professionals only charge a flat rate to maintain your trust. The best of the best offer complimentary programs that provide lifelong support without ongoing maintenance costs. This includes our firm, Thomas Walters.
Let’s take a closer look at trust maintenance costs, starting with a breakdown of the different types of trusts.
Different Types of Trusts and Their Maintenance Prices
There are typically five broad categories of trusts in estate planning: living trusts (revocable trusts), testamentary trusts, special needs trusts (supplemental needs trusts), asset protection trusts, and irrevocable trusts.
Each of these trusts comes with different pricing structures depending on the administration, resources, and processes required.
Below is a short summary of each of these different trust types, as well as the average cost of maintaining each one:
- Living Trusts: A living trust, also known as a Revocable Trust, transfers your assets into the ownership of a trustee. Your beneficiaries may receive these assets at any time you choose, including after your passing.
- Testamentary Trusts: Unlike living trusts, testamentary trusts are created through your will and only take effect upon your death. They’re often preferred over a simple legal will due to their ability to help you avoid probate court.
- Special Needs Trust: Sometimes referred to as a Supplemental Needs Trust, a special needs trust supports individuals with disabilities. These trusts are often set up by parents or guardians to provide financial support for expenses that are not covered by government benefits.
- Asset Protection Trusts: Asset protection trusts can protect your assets from creditors and potential lawsuits. You can also establish these trusts in different states or countries that offer more favorable laws regarding asset protection.
- Irrevocable Living Trust: An irrevocable trust cannot be changed or revoked after it has been established. This type of trust is often used for tax planning and asset protection purposes, as it may help to reduce your estate taxes.
Please keep in mind that online trusts do not typically require any maintenance fees. However, that also means you are in charge of your own maintenance processes — which may cost you double the price of a trained estate lawyer.
The Types of Expenses Associated with Maintaining a Trust
The cost of maintaining a trust depends on several factors, including the complexity of the trust, the services required, the attorney’s experience and location, and the size of the trust.
Here are the typical charges and services associated with maintaining a trust:
- Complexity of the Trust: More complex trusts, such as those with multiple beneficiaries or diverse assets, typically cost more to maintain.
- Size of the Trust: Larger trusts may incur higher fees due to the increased amount of managerial work.
- Marital Status: Separate trust agreements may cost more to administer than joint trust agreements.
- Geographic Location: California living trusts, for example, typically have higher attorney fees due to the higher cost of living.
Keep in mind this is not an exhaustive list of all trust administration costs and maintenance fees. It’s a good idea to get a detailed estimate from an attorney before proceeding with a legal agreement.
How Will You Pay Trust Maintenance Costs?
Estate lawyers may charge for trust fund maintenance in one or more ways.
This can include (but is not limited to):
- An Hourly Rate: Many attorneys charge by the hour. Rates will depend on the attorney’s experience and the filing fee in question.
- Retainer Fees: Some attorneys require a retainer fee, which is an upfront cost required to perform certain tasks.
- Percentage-Based Fees: This is the most common pricing structure associated with trust maintenance. Some estate planning attorneys charge several percentage points of your total asset amount.
- Flat Fee: The flat fee is a set amount of money that covers the entire cost of a fund, including setup, maintenance, and future revisions. It’s often considered the most advantageous pricing structure for maintaining living trusts.
What Do Maintenance Costs Cover For Your Trust Fund?
Trust fund maintenance is a complex process, which is why many estate lawyers charge such high prices.
Below are some of the ongoing activities required to maintain a trust fund:
- Trust Administration: This includes managing trust assets, distributing income to beneficiaries, and making decisions according to the instructions in your trust document.
- Accounting: Your trust attorney may prepare periodic accounting reports for beneficiaries and the court.
- Tax Preparation: Your trust attorney may also assist with filing federal and state tax returns when necessary. They may also assist with calculating your estate tax liability so you have a better understanding of legal obligations.
- Legal Advice: This may include ongoing legal advice regarding the trust, as well as ensuring ongoing compliance with state and federal laws.
- Amendments and Modifications: You may eventually wish to update your trust document, such as adding beneficiary designations or additional assets.
- Dispute Resolution: If disputes arise between beneficiaries or with third parties, your lawyer will step in to help.
- Record Keeping: Your lawyer will maintain accurate records of trust activities and transactions. They may also help with occasional tasks such as resolving changes in beneficiaries or retrieving lost trust documents.
- Investment Management: Some attorneys will work with your financial advisor to manage trust investments.
How Thomas-Waters, PLLC Offers a Better Way to Maintain Your Trust
Trust fund maintenance is complex at best. However, that doesn’t mean it needs to be expensive.
At Thomas-Walters, PLLC, we believe trusts should be affordable to anyone who wants one. That’s why we always charge a flat rate to set up and maintain your trust. There are never any surprises, and you will never feel nickel and dimed.
Once we set up your trust and complete the appropriate documentation, you will never pay us another dollar. We also provide a complimentary Lifetime Lawyer Program, allowing you to make changes and updates to your trust documents at no charge for the remainder of your life.
Conclusion: Get a Lawyer for Life with Thomas-Walters, PLLC
The creation of a trust fund can be a major financial investment, and in more ways than one. That’s why it’s imperative to get it right the first time — and with a lawyer who pledges to stay by your side.
At Thomas-Walters, PLLC, we’re passionate about being your lawyer for life. Whether you’re setting up an irrevocable trust or adding or subtracting a trust asset, we are here to support you every step of the way.
Don’t get nickel and dimed for a trust: instead, contact Thomas-Walters, PLLC to speak with a trust attorney. We will discuss your options for creating a will and determine if our Lifetime Lawyer Program is right for you.
Cost to Maintain a Trust FAQ
Does it cost money to keep a trust?
Yes, it does cost money to keep a trust. Many organizations charge hourly rates for the initial set-up process. You may also have to pay a setup fee to file appropriate documentation, as well as ongoing maintenance fees depending on the attorney. Certain legal offices such as Thomas-Walters, PLLC offer a flat-free program where you can get a lawyer for life.
What is the average trust fund fee?
Most estate planning lawyers charge a percentage fee of your trust’s total estate value. Others may charge additional amounts depending on the type, location, and complexity of your trust agreement.
How much money makes a trust worth it?
You do not have to be wealthy to be a good candidate for a trust account. Keep in mind that assets aren’t limited to cash or real estate — you can also pledge life insurance, collectible vehicles, jewelry, and personal heirlooms.
