Cost Of Living Trust

To ask someone, "How much will it cost me to establish a living trust?" almost invites the reply, "How much will it cost you not to establish a living trust?" The simple truth is that there is no easy answer to the question, and the there are so many variables involved that there is no real answer.

On one hand you can consult your local lawyer or look for information on the internet that will provide a ball park figure of how much the establishment and even the management of the trust will cost. If the subject is gone into in a little more depth, and the total assets of the fund are calculated, then a totally accurate figure can eventually be arrived at.

With the increased awareness of the benefits of establishing a living trust, many specialist lawyers, usually experts on personal taxation and estate taxes have set themselves up as living trust lawyers and are being inundated with clients. These lawyers will charge more than say a lawyer who has all round experience, usually in general or civil cases. However the money invested in them may be more worthwhile when calculating the cost of living trust as they will inevitably be more aware of the various advantages that will be available to establishing a living trust. Some of these advantages may save the trustee thousands of dollars in income tax, and maybe tens of thousands of dollars to the beneficiaries of the trust in inheritance tax.

There are many who have neither the funds nor the inclination to hire a lawyer to prepare a living trust and to administer their estate. For this cross section of the community there is the possibility to download and purchase specific software that will enable them to prepare their own trust, and at the fraction of a cost of a live lawyer. That is to say, one who has blood flowing through their veins to their cold, cold heart?

However if these people get into difficulties when filling out their living trust document, they can use the services of a virtual lawyer, usually employed by the people who produced the living trust software. They are there to answer questions and find solutions, and will provide an immediate reply, either by e-mail, through live chat or in cases of extreme emergency, even by telephone.

No matter how hard he or she may try, the enthusiastic amateur living trust author will eventually need to employ the services of a lawyer or at least a notary public to have the trust document witnessed and registered. If this is not done, then the document will not be legally binding. In certain cases, the lawyer may scan over the document, and there have been no small amount of instances where the lawyer has felt obliged to point out a potentially glaring error which would have cost the trustee and his beneficiaries' large sums of money if they were not corrected.

To sum up the cost of establishing a living trust should be minimal in relation to the benefits accrued in this life and in the next one for all the parties concerned. Attempts to save money should be encouraged, but not at any cost.

Whilst every case of establishing a living trust is unique, if applying a "rule of thumb" on the cost of living trust establishment, it would be fair to say that it should not be allowed to rise over 2% of the value of the estate.