Living Trust Cost: How Much Does a Living Trust Cost to Set Up?

What A Living Trust Does And Why Is It Worth The Cost?

A living trust is a legal document you draft during your lifetime to manage the transfer of your assets after you die. You chose a trustee to manage the trust and distribute assets according to your instructions. Here are a few reasons why it’s worth setting up a living trust:

• It helps ensures that your assets titled in the trust are transferred to the beneficiaries you chose during your lifetime.
• If something unexpected happens, you can rely on a trustee to manage your assets. This can be a strong backup tool for incapacity planning when it’s set up and funded correctly.
• You don't just control who receives the assets, but also when and how. This lets you manage the timing and conditions of distribution.
• Unlike a will, which often involves your asset distribution through public records, a living trust keeps it private.

Without a living trust, your assets may go to a probate before reaching (or not reaching) your loved ones. This could be costly and time-consuming and may even lead to distributions based on state law as opposed to your personal wishes. So, a living trust can be worth the cost for the privacy, control and management it offers. It especially makes sense for someone who is a homeowner, has a growing estate or has a complex family dynamic.

To effectively make this work as you intended, it’s important to fund the trust correctly; that's when the cost and effort of setting up a trust come into the picture. 

Common Ways To Set Up A Living Trust

Drafting a living trust during your lifetime can be a good choice to keep your assets organized, prepare for incapacity and make it easier for your loved ones to receive their intended shares while reducing the need for probate and the potential for conflict. That’s why positioning your assets smartly in a living trust is important.

While some people prefer doing it themselves, others may rely on an estate planning attorney or online services. The right option for you may vary depending on your personal situation, your estate size and other factors. Here are details of the most common ways to set up a living trust:

Attorney-Made Trust

An attorney-made trust is the traditional way to draft your living trust with solid legal advice based on your personal situation and state rules. In this case, an attorney collects all required details, recommends a personalized structure, drafts the legal documents and may even help in funding the trust.

This way of drafting your trust is best for blended families with a complex structure, business owners, or if you own multiple properties. It can also make sense to handle uneven inheritance or minor beneficiaries. Due to expert advice, chances of errors in paperwork are minimal in this case, and you easily get tailored advice. But the costs are often higher in comparison to other ways of setting up a trust.

Online Services

Using online services to draft your trust means seeking help from websites or apps without hiring a traditional lawyer or attorney. These services often provide a guided setup instead of legal advice, and often involve the following steps:

• You answer questions to provide personal details about you, your family, and the list of beneficiaries, trustees and assets. 
• Based on the information you provide, the service generates a trust document.
• You sign the documents when received. Some service providers may also offer online notary services where it’s legally allowed, depending on the state. 
• After you sign, you may get funding guidance with a checklist and instructions for retitling assets into the trust. 

Drafting your trust online also comes with support options ranging from add-on legal review to phone support. This option may suit you if you prefer a straightforward, fast and structured process at a lower cost than hiring an attorney. But remember, it may limit personalization, and sometimes detailed funding help may cost you more.

DIY/Template Route

You can also draft your living trust on your own without any external assistance from an attorney or a service provider. This option includes using downloadable templates (which typically still must be purchased), filling in details, signing/notarizing, and funding the trust with limited guidance.

Drafting the living trust yourself can seem cost-effective, but correcting any mistakes later could be expensive. This option can make sense if your estate is not too large and you have very limited assets, such as one home and a bank account, and your list of beneficiaries is straightforward and doesn’t need too much planning.

Read: 5 Potential Benefits of a Living Trust

Quick Summary: Cost Ranges By Methods

The cost of setting up a living trust may vary based on the method you choose. In general, DIY options are the cheapest, and attorney-made trusts are expensive. Here’s a quick look at the cost ranges of different methods:

What’s Included In The Price

In general the living trust costs include the core trust document and step-by-step instructions for signing. But what’s included may often differ based on the option you use to set up a living trust. Sometimes the pricing may even include supporting documents like a pour-over will, notary or witness guidance, and guidelines to fund the trust. When setting up the trust, it’s good to ask what is included and what’s not.

Hidden Costs People Forget (The “All-In” Total)

At times, upfront costs to set up a living trust may look reasonable, but the actual cost may vary. This is because the final total may involve other charges as well. Some common charges most people feel surprised about are:

• Formal costs of notary/witness requirements for signatures 
• Cost of funding the trust, such as retitling the account and assigning assets 
• Transfer of real estate transfers, if you’re a homeowner and need a transfer deed 
• Admin charges, certified copies and other miscellaneous costs
• Attorneys may also charge extra for revisions, rectifying mistakes or updates based on life changes.

What Can Add To Costs Later

Setting up a living trust is a one-time cost, but maintaining the trust can involve various ongoing costs. Though there’s no automatic fee that you pay every year to keep a trust, there could be additional costs when you update your trust due to personal or financial changes. Costs may show up later when you need to correct a trust that's wrongly funded or you need an attorney to review or update due some of the following reasons:

• You buy a new property and add it to the trust
• You sell a property and want to remove it from the trust
• You want to update the list of beneficiaries
• You want to change the trustee
• You experience a major life change, such as marriage, divorce, new child, or adoption
• You opened a new financial account

Note: You can typically make changes only to a revocable living trust. Irrevocable trusts generally cannot be amended without court approval.

Average Cost of a Will vs. Trust?

Both wills and trusts function to transfer your assets to your rightful beneficiaries after you pass away. But a will often involves probate and public records, although they are typically less expensive to set up. A living trust, on the other hand, can make transfers smoother for assets titled in the trust, often helping those assets avoid probate and offering more privacy. However, they tend to cost more to create. Here are the differences in cost along with other features of wills vs. trusts.

Factors That Influence Cost Of A Living Trust

The cost of setting up a living trust may differ based on the method you use to draft the document. But it may also vary based on your personal situation. Here are some factors that may influence your cost of a living trust:

Estate Size: If you own multiple properties, many bank accounts or investment portfolios, costs may be higher. But if you own limited assets, retitling assets could be easy, thus lowering costs.

Complexity of assets: Retitling one home vs multiple properties used for various purposes, such as rentals or business interests, may involve different costs.

Family situation: If your family situation is simple and your beneficiary designations are straightforward, costs are still lower. But in the case of blended families, minor children, or\ complex relationships due to remarriage, divorce, or adoption, costs could be higher.

Customization needs: A living trust offers you full control during and after your lifetime. So, you can always put in special instructions, staged distributions and unique trustee setups. Such customizations often cost more than simple trustee and beneficiary designations.

In addition to the above, the cost of setting up a living trust may also vary based on the support level you need, such as help with funding or making revisions. Costs can also increase in case you create a living trust in urgency.

Read: How Much does it Cost to Make a Will?

Tips To Set Up A Living Trust Without Overspending

Funding the living trust properly is important if you want your trust assets to avoid probate, and it can also help ensure a smoother transfer of those assets to your loved ones. Here are a few tips to set up a living trust without overspending:

• Be clear about what you’ll put in the trust. Note down the list of assets, and be sure of who would manage it as a trustee and who would be the beneficiary. In case of a complex family structure, try to keep all assets structured simply.
• If you’re using an attorney, ask for the ‘all-in’ estimate, meaning question what all does the living trust cost include. Always compare prices before going with a single quote.
• Seek clarity on whether there are any free revisions or complimentary updates available. If you have a growing estate, this add-on can be helpful to avoid costs later.
• Funding the trust may not always be included in your living trust costs, but it's a critical step. Trying to save money funding the trust may cost more to rectify errors later.
• Be mindful of your situation. If your situation is simple, an online service could be enough. For complex circumstances, you may want to consult an attorney to save the upfront costs. Fixing errors can be more expensive.