How Much Does a Living Trust Cost?

The cost of a living trust depends on several factors. If you’re seeking a smooth and efficient transfer of your assets upon your passing, a living trust can be a strategic option to consider as part of your estate plan. But before you commit to drafting this legal document, you may wonder about the cost of the whole process. This blog dives into the costs that come with creating a living trust in Illinois, empowering you to make informed decisions for your estate plan.

But first, let’s take a closer look at what a living trust is.

Understanding Living Trusts in Illinois

A living trust, also known as an inter vivos trust, almost always refers to a revocable living trust (as opposed to an irrevocable trust). It enables you to transfer the ownership of your house, personal finances, investment accounts, and other assets to a designated trustee. The trustee, most often you or you and your spouse, is responsible for managing the assets in accordance with your instructions while you’re alive and for distributing them to your beneficiaries upon your death.

Living trusts offer a key advantage: they bypass probate, a tedious court process that manages asset distribution after a person dies. In Illinois, just as in many other states, the probate process is public, time-consuming, and expensive. In contrast, a living trust allows assets to be transferred outside probate, saving your beneficiaries time and money.

Note that living trusts do not reduce the federal estate tax for a single person. However, spouses in Illinois can protect up to $8 million from estate taxes with an AB living trust.

Read more: Secure Your Legacy: An Essential Guide to Creating an Illinois Living Trust

What Factors Influence the Cost of a Living Trust in Illinois?

The cost of establishing a living trust can vary depending on several factors:

1. Attorney Fees vs. DIY Costs for Living Trust Cost

The biggest determining factor in the cost of a living trust is whether you choose to work with a lawyer or establish your estate plan yourself.

Hiring an estate planning attorney in Illinois for a basic living trust typically costs between $2,500 and $6,000. This range can vary depending on the lawyer’s experience, reputation, and fee structure (hourly vs. flat fee). By working with a licensed attorney specializing in estate planning, you can be confident that your trust is drafted correctly and complies with Illinois law. Your lawyer can also tailor the trust to your specific needs and provide valuable advice on other estate-planning considerations, such as minor children, debts, and inheritance taxes. In the long run, a well-crafted living trust can save your beneficiaries money and headaches during the distribution process.

On the other hand, using an online service or software for estate planning and living trust creation costs just a few hundred dollars. While appealing for its affordability, a DIY estate planning tool may not account for the nuances of your situation or state laws, potentially leading to legal issues.

2. Living Trust Cost depends on the Complexity of the Estate

The complexity of your estate, including the types and value of your assets, can impact the cost of establishing a living trust. A simple estate with few assets and beneficiaries will likely require less time and expertise from an attorney, resulting in a lower fee. Conversely, a complex estate with significant assets, multiple beneficiaries, or unique circumstances (e.g., blended families) will typically require more complex trust drafting and potentially additional legal documents, increasing costs.

3. Trustee Fees

Successor Trustee fees can vary significantly depending on whether you choose a family member, friend, or professional trustee. If you appoint a professional or corporate trustee to manage your trust after your death, additional fees will apply to their services. For instance, bank trust departments typically charge 1% to 2% annually on trust assets under management.

4. Administrative Costs

Administrative costs for drafting and filing trust deeds for your property range from $300 to $400. They can also include any fees associated with transferring assets into the trust. For example, administrative costs can include investment management fees if the trust holds investments, accounting fees if the trust requires complex tax filings, or property management fees if the trust holds real estate.

5. Total Living Trust Costs

Overall, expect to pay between $2,500 and $4,000 for a basic living trust in Illinois. A couple of thousand dollars might seem like a steep expense for a legal document, but it’s an investment in your family’s future that can save your loved ones significant time, money, and emotional stress. When you factor in the potential benefits and savings of avoiding probate, the cost of a professionally drafted living trust is a sound financial decision.

Whether you need help choosing beneficiary designations, escaping the probate process, or minimizing estate taxes, you can greatly benefit by consulting with Tuohy Law Offices. As your trusted local estate planning attorneys in Illinois, we can help establish a living trust tailored to your unique circumstances, needs, and goals. Contact us today.

This blog entry is for informationaland planning purposes. It is not intended to be, nor should it be substituted for, legal advice, which turns on specific facts and laws in specific jurisdictions. No reader of this blog should act or refrain from acting based on any information included in, or accessible through, this blog without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the reader’s state, country, or other appropriate licensing jurisdiction.