How Much Does It Cost to Put Your House in a Trust?

How Much Does It Cost to Put Your House in a Trust?

Placing your house into a living trust is a common estate planning strategy that can protect your assets, avoid probate, and ensure a smoother transfer to your beneficiaries. The cost of doing so varies widely depending on your approach, the complexity of your estate, your location, and whether you hire professional help or handle the process yourself. Understanding these costs in detail helps you make informed decisions and plan your estate efficiently.

1. DIY Approach

If you have a relatively simple estate and are comfortable handling legal documents, you may choose to create a living trust on your own using online platforms or DIY kits. While this can be a cost-effective option, it requires careful attention to detail to avoid mistakes that could cause legal or tax issues later.

• Living Trust Document: Online services such as LegalZoom, Rocket Lawyer, or Nolo typically charge between $250 and $1,000 to create a basic revocable living trust document. The price depends on the level of customization and the complexity of your estate. Some services provide templates and guidance, while others offer step-by-step assistance.
• Deed Transfer: After creating the trust, you must transfer the property deed from your name into the name of the trust. This may involve preparation fees if using a service, and county recording fees generally range from $30 to $225. This step, called “funding the trust,” is essential because any asset not properly transferred into the trust may still be subject to probate.
• Additional Considerations: DIY trusts do not include personalized legal advice. You need to ensure your trust complies with state laws, consider potential tax implications, and carefully follow instructions for all assets you include.

2. Attorney Assistance

Hiring an estate planning attorney is generally the most secure way to put your house in a trust, particularly if your estate is complex, includes multiple properties, or you want to ensure long-term protection and flexibility.

• Attorney Fees: Attorneys typically charge between $3,500 and $6,000 for preparing a revocable living trust and handling the deed transfer for a single property. For more complicated estates that include multiple properties, business interests, or intricate family situations, fees can increase to $7,000 or more.
• Deed and Funding Assistance: Your attorney will draft and record the new deed, ensuring it is legally valid and that all relevant assets are properly transferred to the trust. This avoids common errors that could invalidate the trust or cause probate issues later.
• Ongoing Support: Attorneys can also provide guidance on updating your trust after major life events, such as marriage, divorce, birth of children, or acquisition of new assets. This ensures the trust continues to meet your goals over time.

Other Costs and Considerations

There are several additional factors that may influence the total cost of putting your house in a trust:

• Transfer Taxes and Recording Fees: Some states or counties may impose additional taxes or fees when transferring a deed to a trust. These costs vary depending on local regulations and the value of the property.
• Complex Estates: Estates with multiple properties, valuable investments, or unique assets may require additional legal work, appraisals, or tax planning, increasing overall costs.
• Trust Maintenance: Even after funding the trust, you may need periodic updates or reviews, particularly if laws change or your family situation evolves. Some attorneys offer annual or as-needed reviews for an additional fee.
• Potential Savings: Although there are upfront costs, a properly funded trust can save your heirs time, legal fees, and the public scrutiny of probate, which may far outweigh the initial investment.

Pros and Cons of DIY vs. Attorney Assistance

Choosing between a DIY approach and hiring an attorney depends on your comfort with legal documents, the complexity of your estate, and your goals for asset protection and family planning.

• DIY Approach: Lower upfront cost, but greater risk of mistakes, potential legal challenges, and limited guidance on tax or estate planning nuances.
• Attorney Assistance: Higher upfront cost, but provides professional oversight, ensures compliance with state laws, and offers peace of mind that your trust is valid and properly funded.

Conclusion

Putting your house in a living trust can involve a range of costs, from a few hundred dollars for a DIY approach to several thousand for professional assistance. While the DIY route may save money initially, working with an estate planning attorney provides security, reduces risks of legal issues, and ensures your trust is structured and funded correctly. Ultimately, investing in proper estate planning can protect your family, avoid probate, and give you peace of mind knowing your assets will be managed according to your wishes.