The full cost of making a living trust

It usually costs between $1,000 and $5,000 to set up a living trust. But it can vary widely, depending on:

• the kinds of assets you put in the trust
• how complex it is to manage
• where you live

When you are first setting up a new living trust, your costs cover two things:

• package of trust documents
• moving assets into the trust

There are ongoing costs, too. You might have to pay to:

• change assets in the trust
• maintain the trust (because of trustee and investment fees)
• change your beneficiaries

‍

The biggest thing that affects the cost of a living trust is the complexity of the assets in your estate

‍

The cost to set up a living trust mainly depends on how complex your assets are. 

If you have many different types of assets, it takes more work and legal know-how to manage them. “Complex” assets might include:

• multiple properties
• alternative investments
• business interests
• assets held in different countries

If your estate has simple assets — say, one home and a few bank accounts — setting up a trust is straightforward and costs less.

Also, if your estate plan has special rules for how your assets should be given out — like conditions on inheritances or trusts for children — the trust needs more detailed rules. This can make the trust more complicated and raise the cost.

‍

The structure of your estate can also have a big impact

‍

How your estate is set up also affects the cost of a living trust. More complex plans, like different rules for different family members or plans to give to charities, need careful planning.

For example, if you want to give money to your children at different times — some when they turn 18, more after college graduation, and the rest at 30 — each condition has to be clear in the trust. 

Or maybe you have a relative with special needs, and you want the trust to support them without them losing any government help they receive. This all needs to be carefully managed in the trust document.

Think about your personal items too. If you want your spouse to get your house but your art collection to go to museums, each piece needs its own plan in the documents.

Family matters can make things more complex, too. If you have children from different relationships, or you want to leave someone out while providing for others, this needs very clear legal wording to avoid disputes and make sure your wishes are followed.

‍

Trusts tend to be more expensive in some states than others

‍

The cost to set up a living trust changes from state to state. In some places, it's more expensive because of higher living costs and lawyer fees.

For instance, trusts in California or New York usually cost more than in Texas or Florida. This is because lawyers in the first two states often charge more.

It's wise to compare prices from different lawyers in your area. This helps you know what a trust might cost where you live and plan your budget better.

‍

‍

Adding new assets to the trust can cost money

‍

If you want to add more assets to the trust after it’s been set up, you might have to pay.

‍

Real estate

‍

To move real estate properties into a trust, you have to draft and sign a deed that changes the owner from you to the trust. 

You might have to pay deed recording fees and transfer taxes to do this.

If the property is mortgaged, you might have to ask your lender for approval before you can transfer the property. This might involve small administrative fees.

Example: Sarah owns a vacation home and wants to include it in her living trust. She hires a real estate attorney who helps her draft and record the deed. Sarah has to pay fees for: 

• the legal help
• deed recording
• title searches

‍

Financial accounts

‍

When you add bank or investment accounts to a living trust, you often need to fill out forms from your bank. Some banks might charge a fee for transferring accounts or ask for notarized papers. 

If you have retirement accounts, you may need to update who will receive the benefits, which might cost a fee.

Example: John wants to put his savings and investments into his trust to help pass them to his kids easily. He works with his financial advisor to get the right forms.

John pays fees for:

• account transfers
• professional assistance

‍

Personal property

‍

You can include items like cars, jewelry, art, or collectibles in a living trust. These items don't usually need complex legal steps, but you might need to get documents notarized, which can cost a small fee.

Example: Emily has art and jewelry she wants to give to her grandkids through her trust. She gets help from an estate lawyer to handle the paperwork and transfer ownership.

Emily pays for:

• legal help
• notarization

‍

Business interests

‍

If you own a business, you might want to put your ownership into a trust to keep the business running smoothly after you're gone. This can involve making agreements, changing company rules, or getting approval from business partners, all of which might need a lawyer and result in fees.

Example: David started a family business and wants to keep it in the family. He hires business lawyers to help put his ownership into his trust. This helps ensure the business is managed well after he's gone.

David pays for:

• legal consultations
• document preparation

‍

There are maintenance costs to consider, too

‍

Setting up a living trust is the most expensive part. But you should also think about the ongoing maintenance costs, too.

‍

Administrative fees

‍

If you hire a professional, like a bank, to manage your trust, they will charge you each year. This fee is usually between 0.5% and 1% of the trust’s assets. This can add up, especially for larger trusts.

‍

Tax preparation fees

‍

Living trusts might need their own tax returns. These can be complex and usually require a professional to prepare them. This means you will have to pay for these services every year.

‍

Legal costs

‍

Over time, you might need to change your trust due to changes in your life or the law. Any changes to your trust need a lawyer, and this costs money.

‍

Investment management fees

‍

If your trust has investments, managing these will cost money. The cost depends on how the investments are managed.

‍

Miscellaneous costs

‍

Other costs can include paying for property appraisals, insurance, and other services to manage the trust’s property properly.

‍

Making changes to the structure of your trust can cost you

‍

Sometimes you need to update your trust due to changes in your life or goals. These updates might include: 

• adding or removing beneficiaries 
• changing the trustee managing the trust
• altering when and how the trust's assets are distributed 

Each change can lead to extra costs.

‍

Lawyer fees

‍

Updating a trust usually requires a lawyer. Here's what they need to do:

• review the current trust
• discuss your changes
• write new trust documents or change existing ones
• make sure the changes follow state laws

This detailed work takes time and increases the cost.

‍

Filing fees

‍

Some updates to your trust need to be officially recorded, especially if they involve property. 

These fees vary by state. Fees tend to be higher in areas with more complicated property rules

‍

Other expenses

‍

Updating your trust can cause other expenses. For example:

• adding property to the trust might need a property valuation
• changing how the trust's assets are managed may increase management fees
• adding a new person to the trust could mean new account setups and tax filings

‍

Some types of living trust tend to be more expensive than others

‍

There are different kinds of living trust. Some are more complex to set up than others, and this can make them more expensive.

A-B trust or bypass trust

‍

These trusts are made jointly by spouses. An A-B or bypass trust splits into two parts when one spouse dies, and the part owned by the person who dies becomes fixed and can’t be changed.

These trusts tend to be expensive because they need advanced legal knowledge to set up properly, handle taxes well, and make sure everything goes smoothly after one spouse dies.

‍

Joint revocable trust

‍

Joint revocable trusts are used by couples to manage their assets together. They need to be carefully planned to handle the possible death of one partner.  

This makes them more complex — and therefore more expensive — than a trust for one person because it has to consider both partners' needs and future possibilities.

‍

Pour-over will trust

‍

Pour-over will trusts involve making both a will and a trust. When someone dies, any leftover assets get moved into a trust.

They’re usually more expensive than a basic living trust because you have to create and align a will and a trust so they work well together, which means more legal work.

‍

Trust for minors

‍

Trusts made for children tend to be more expensive because the instructions are usually more complex.

Such trusts need clear rules on how the funds should be used, including things like:

‍

• school costs
• health care
• day-to-day provisions

‍

Trustees generally have to be more involved with these kinds of trusts, too, so their fees might be higher.

‍

Taxes are an indirect “cost”

‍

When you have a living trust, you need to think about taxes as a hidden cost. These taxes can add up and affect how much it costs to keep the trust.

‍

Taxes on trust income

‍

Trusts can make money from their assets, like rent from property or interest from money.

This income usually needs to be taxed. The trust’s setup will determine if the trust pays the tax or if the beneficiaries do.

‍

Estate taxes

‍

Living trusts help avoid probate costs, but you might have to pay estate taxes.

It’s important to plan for how much estate tax might need to be paid when the person who made the trust dies. This tax can reduce what the beneficiaries get.

‍

Capital gains taxes

‍

If the trust sells assets, there might be taxes on the profit. This depends on how long the assets were held and how much their value went up.

Careful planning on when to sell assets can help lower these taxes.

‍

Trusts aren’t the only estate planning tool — budget for a will, power of attorney and healthcare directive, too

‍

Trusts are important, but they aren't the only thing you need for estate planning. You should also think about a will, a power of attorney, and a healthcare directive. Each one has its own cost.

‍

Cost to make a will

‍

A will details who gets your things after you die.

Writing a will can cost between $300 and $1,000. They’re cheaper if you don’t use an attorney. 

With Snug, a will costs $195.

‍

Cost for power of attorney

‍

A power of attorney lets someone you trust handle your money or healthcare decisions if you can't.

Setting one up usually costs from $250 to $500, but it’s included for free when make a will or trust with Snug.

‍

Cost for healthcare directive

‍

This tells doctors your wishes for medical care if you can't make your own decisions.

It costs about $100 to $500 to make one, depending on if it's part of a bigger plan or alone.

With Snug, healthcare directives are free when you make a will or trust with Snug.

‍

You don’t always need a lawyer for a living trust— but it’s often a good idea

‍

Lawyer’s fees are (by far) the biggest cost involved with setting up a trust. But setting up a living trust can sometimes be done without a lawyer, especially if your estate is simple.

‍

When you might not need a lawyer

‍

If your living trust is straightforward, you might not need legal help.

Tools like Snug  (👋) can help you make a basic living trust.

‍

The benefits of hiring a lawyer

‍

Lawyers can help when your trust involves  complicated assets or very specific instructions for beneficiaries.

They’ll make sure your trust follows state laws and works as intended.

If you have a simple estate, it can be a good idea to make your trust online and then get a lawyer to double-check it.

If you’re ready to get started with your own living trust, you can make one with Snug for $500.