Will or Trust? The Wrong Choice Could Cost Thousands
By Steven W. Allen
When planning your estate, what costs more, a will or a trust? Since an attorney
can prepare an average will for $400 to $500 and set up an average trust for about
$2,000 to $2,500, your decision is made, right?
But wait, there is more to it! You don't have to be a CPA to figure that it costs
five times more to set up the average trust than the average will. The key words
here are “set up.” The prices I just quoted are for exactly that—“setting
up” your will or trust. Those up-front costs don’t include the cost of administering
your wishes after your death.
Probate Fees Please Attorneys
When you die, what does it cost to carry out your carefully laid plans? Many people
believe it’s simply the cost to create the document that plans their estate: their
will or trust. If your attorney draws up a will for you, it may cost $400. However,
upon your death, your estate goes through the probate process.
The fees for settling your estate could easily reach $10,000 (the average cost
of probate). Now the total cost of settling your estate isn’t $400—it’s a whopping
$10,400. This explains why a will is one of the most expensive legal documents
in this country and why many attorneys prefer to draft a simple will rather than
spend the time and effort creating and funding a trust.
No Court or Attorneys Required With A Trust
Remember that the average trust costs $2,000 to $2,500 to set up, but there’s no
probate. A trust eliminates the total cost of probate and that potential $10,000
Your successor trustee has the immediate right to distribute your property according
to the plan described in your trust. He doesn’t have to go to a court or even hire
an attorney to settle the estate.
Your successor trustee might feel unsure about how to distribute your property according
to your trust and want to have some counsel and advice. Often, the successor trustee
will go to an attorney to review the trust document and learn how to proceed.
Let’s assume this happens. The attorney visits with the successor trustee and may
prepare some transfer documents. The attorney charges a few hundred dollars for
this service. (The average fee to review and help settle an estate with a trust
is about $500.)
Now the total cost of your estate plan is $2,500. Compare this to using a will for
your estate plan, which would cost $10,400. Again, it doesn’t take a CPA to figure
out that a will actually costs four times more than a trust!
Most Likely to Be Contested, High Costs to Settle
Remember, of all legal documents, a will is the most likely to be contested.
A will is also one of the most expensive legal documents because of the total costs
to settle an estate. Make the most of your estate planning time and dollars, create
a revocable living trust.
Steven W. Allen has been a practicing Estate Planning attorney for over 30 years,
has authored four books and given over 750 presentations in several states on these