Those who are considering an estate plan might be trying to decide between a will and a revocable living trust. For many, the decision simply comes down to cost.
While a trust can be more costly than a simple will, depending on your specific needs, it could be more cost effective to spend a little more now, and save your loved ones money in the future.
Should you decide on a living trust, you will be able to make changes in the trust and even revoke it entirely during your lifetime should you decide to do so. The revocable living trust holds title to all your assets, and manages those assets for your beneficiaries.
Perhaps the primary benefit of a revocable living trust is that your heirs are able to avoid probate with a trust—something they cannot do with a will, which is a public record, therefore can be seen by any interested party.
How Much Will a Revocable Living Trust Cost?
Should you decide that a revocable living trust is the best way to proceed with your estate
plan, the next question is how much will the trust cost.
While the cost can vary significantly, based on your specific circumstances, as well as your state and the attorney, generally speaking, the cost to have an attorney draft a revocable living trust is considerably more than the cost to draft a will.
However, you need to look beyond the initial cost of a revocable living trust, because you will probably get more than the trust for your money. A comprehensive estate plan can include a will, a power of attorney, and a health care directive, and these documents may be included in the cost of your trust. It is important to find out exactly what is included up front.
As an example, are retitling of assets included in the price? To be placed in a trust, your assets must be retitled in the name of the trust, allowing them to “pass through” the trust upon your death. If your home is going to be a part of the trust, then the deed must be changed. Rather than your name on the deed, the name of the trust will be on the deed. Once the necessary deeds are retitled, they must then be re-recorded, and you will be responsible for the normal fees paid for real estate transactions.
How You Could Save Money with a Revocable Living Trust
If you have a will, when the will goes through probate, the cost to probate the will can also be considerable, probate charges your estate based on its size.
A trust, on the other hand, will often require very few, if any, probate fees. So, while you will spend more money for a trust in upfront costs than you would for a will, your beneficiaries will spend considerably less if you have a trust than if you have a will which requires probate.
There are a number of considerations when you are deciding between a will and a revocable living trust. It is extremely important that you discuss all these issues with a qualified estate planning attorney, to ensure you are going the right direction with your estate plan. Your attorney knows the laws in your state and can ensure that everything in your estate plan is prepared correctly and will work as it is intended to work after your death.