The cost of having a trust prepared can vary based on a number of factors. A trust will often be prepared by an estate attorney.
A trust may be included as part of an estate plan or it may be created separately. The cost of having a trust prepared may vary depending on:
- The experience of the lawyer;
- The location of the trust;
- How complex or in-depth the trust is; and
- The value of the trust.
For example, if an individual creates a trust for a small amount of money or one item, such as a vehicle, the cost will be lower than if the trust has large sums of money and multiple assets or property.
There are a few types of fee schedules that lawyers typically use. These include hourly rates and flat fees.
If an attorney charges an hourly rate, their compensation is based upon the amount of time, or hours, that they work on the case. In certain cases, an attorney will also charge a retainer fee, or an amount that is paid in advance.
A retainer fee is like a down payment for the attorney to work on the case. The costs associated with working the case will be deducted from this fee.
Once the retainer fee is depleted, the attorney will begin billing at their hourly rate. Retainer fees are generally non-refundable.
In general, the hourly rate for an attorney can range from $100-$500, depending on their experience. These costs may also vary across locations and, in some cases, may be much higher than $500. Attorneys are required, however, to charge reasonable fees based upon their experience, skills, and location.
It is common for an attorney to use a flat fee arrangement in certain types of estate cases, including the creation of simple trusts. A flat fee is one amount that is paid for the lawyer to complete their work on the case.
The average cost for an attorney to create a trust is between $1,000 and $1,500. If a couple is creating a trust, that cost may range from $1,200 to $1,500. The cost may vary by attorney and location.
What are Some Factors Used When Estimating the Cost of Preparing a Trust?
As previously noted, there are several factors which are examined when determining the cost of preparing a trust. Aside from the specifics of the case, a lawyer with many years of experience in a large city will charge more than a new lawyer in a small town.
Other factors that may have an affect the cost include:
- The type of representation the attorney will provide;
- The services to be performed; and
- The type of fee arrangement that will be used.
The type of representation that will be provided is a large factor in the cost of trust creation. The more assets and complex issues the trust has, the more the cost will increase.
The services to be performed also have a great impact on the cost. If an individual simply wants to create a trust, the cost may be fairly low. If, however, the trust creation is part of a larger estate plan, the costs will be higher. In addition, costs will increase as the complexity of the trust increases.
The fee arrangement that the attorney charges is also an important factor of the cost. Factors that may be considered when determining attorney’s fees may include:
- The amount of time and the effort that will be required to complete the work;
- How difficult the case should be;
- The skills that are required by the attorney to perform the legal services;
- The fee amounts that are typically charged in the area for similar legal services by attorneys with similar skills, reputation and experience; and
- The extent of the services that are to be performed by the attorney.
What Services Do Trust Lawyers Typically Provide?
A trust attorney is an attorney who specializes in the laws related to trusts. A trust is a tool which is used in estate planning.
A trust creates a relationship that is directed by the creator of the trust, called a trustor or a settlor. A trust directs one or more individuals, known as trustees, to hold the property of the trustor subject to certain duties and to use and protect that property on behalf of and for the benefit of other individuals who are to receive it, known as beneficiaries.
An individual may create a trust for many different reasons. These reasons may include:
- The financial benefit of the individual who created it;
- Financial support for a surviving spouse or a minor child or children; and
- A charitable purpose.
There are requirements for creating a trust which must be satisfied in order for the trust to be valid. These requirements include:
- Intent. The trustor must have intended to create a trust at the time of its creation;
- A trustee. There must be an individual who is in charge of managing the trust for the benefit of the beneficiary as well as transferring the assets to the beneficiary. If one is not designated, the court may appoint one;
- A beneficiary or beneficiaries. The trust must clearly indicate who will receive the assets in the trust;
- A purpose. There must be a specific purpose for the trust that does not involve illegal activity; and
- Assets. The trust must contain assets, such as money or property. A trust cannot exist without assets.
It is important to note that there are certain items that cannot be transferred into a trust, including:
- Life insurance policies;
- Retirement accounts;
- Pension plans, and
- Health savings accounts.
Are There Any Advantages to Hiring a Trusts Attorney?
Yes, there are many advantages to hiring a trust attorney. There are numerous different types of trusts that can be created. A trust attorney can examine the property to be placed in the trust and the individual’s reasons for creating it and determine the best fit.
Some examples of the types of trusts available include, but are not limited to:
An inter vivos trust is one of the most commonly created types of trusts. This type of trust is created while the settlor is still alive. It is usually revocable so that the settlor may add or remove property freely during their lifetime.
A testamentary trust is another common trust. It is created in a will. It usually becomes effective when the trust creator passes away.
Charitable trusts are created to transfer and designate an individual’s assets or property to a charitable organization. In many cases, the requirements for the creation of a charitable trust are more relaxed than other types of trusts, since they are intended to benefit the public.
Should I Hire an Attorney to Help Me Prepare a Trust?
Yes, it is very important to have an experienced trust lawyer to assist you with preparing your trust. You are likely creating a trust to take care of someone you care for and ensure they have future stability. A trust lawyer will draft a valid and enforceable trust that will ensure the funds or property you want passed on to a loved one or donated will end up where you want them to.