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| | | A trust is a legal relationship which sets up a person or company (the trustee) to manage property for the benefit of another (the beneficiary). A trust is an estate-planning tool that can be used in addition to or instead of a will. | | |
| Typical costs: | - Having an estate planning attorney create a basic trust starts around $900 -$1,500, but a situation requiring a bit more evaluation and planning can run $1,500 -$3,500 or more, depending on the complexity and the extent of the assets involved.
- Do-it-yourself living trust kits are available for anywhere from $25 -$500. Laws vary; be sure the information provided is accurate in your state. Plus, legal experts assert that living trusts aren't suitable for everyone, and that individual circumstances should be evaluated by a qualified attorney. Oregon State University gives a brief overview and describes advantages and disadvantages of a trust.
What should be included: | - There are two types of trusts, testamentary and living. A testamentary trust is outlined in your will and is created only after you die; these are typically set up for young children or other heirs who are considered to need someone to manage their assets for them. A living trust is created during your lifetime, is a private document that doesn't have to be filed in a public court and doesn't have to go through the probate process the way a will does. A revocable living trust can be amended or ended at any time; an irrevocable living trust cannot be changed or discontinued. With a living trust, you can be both the manager (trustee) of the trust and the beneficiary (receiving the income) of a living trust. The American Bar Association provides a detailed overview of living trusts, including advantages and disadvantages.
- Creating a living trust should be part of a thoughtful, deliberate estate planning process; don't be pressured into creating a living trust. Consumerlaw.org discusses how to avoid living trust scams.
Additional costs: | - There can be filing fees to transfer property deeds, car registration or other assets into the name of the living trust.
- Whether it's a testamentary or living trust, the trustee is legally entitled to be paid for any work done, and can take reasonable fees out of the estate. This will vary depending on the amount of work required and the complexity and value of the trust. (However, the trustee can waive payment.)
Shopping for a trust: | |
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Article updated October 2008 |
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