If you pick up the phone and call an attorney's office to ask about the cost of a Living Trust and related documents, this is the last question they will want to receive. In my experience, there are two reasons behind this:
1) The attorney does not want to scare off a potential client with sticker shock.
2) The attorney does not want to pigeonhole themselves into committing to a fee or cost estimate.
The result is that the attorney will dodge the question and postpone answering it to a later point in the process. At best, they will provide a very wide range of potential fees.
This is all unfortunate, considering that, according to a recent legal trends survey of over 2,000 consumers, 76% of potential clients who contact an attorney want a clear estimate of what their legal issue will cost. In fact, 64% of consumers surveyed were actually driven away by attorneys who failed to provide a clear cost estimate.
I find the above data particularly concerning for estate planning matters such as Wills and Trusts. Reason being, if a potential client is steered away from an attorney due to their failure to provide a clear indication of cost, that potential client will probably not take action and their loved ones will ultimately suffer as a result. That premise is supported by a recent study indicating that only 4 out of 10 Americans have an estate plan in place. What’s worse, that statistic likely includes people who took DIY or other shortcut methods and have estate plans that may not even work very well when the time comes. See this page on our website for information about the danger of DIY methods according to the American Bar Association’s research.
The Typical Cost of a Living Trust if Prepared by an Attorney
Most attorneys will prepare a Living Trust and all related documents for a flat fee. Some firms are still stuck in the hourly billing model, yet their fees tend to round out fairly close to what a flat fee attorney will charge.
In both instances, a traditional California law firm in the Bay Area will charge $2,000-$3,500 for a basic Living Trust with the needed supporting documents, including a property deed for transferring real estate to your Trust. Occasionally they’ll be a little bit less or a little bit more, but the above range is pretty spot on for most basic situations.
Is it worth it? If the Trust is done right and properly funded, it’s absolutely worth it. As explained on this page, the cost to transfer a median priced Bay Area home through the probate process can easily cost over $35,000. If that same home is owned by a Trust, however, those transfer fees and costs are eliminated because no probate will be required. Then of course, there’s the stress and uncertainty you’ll save your loved ones by having a clear plan in place for them to benefit from (one that can be administered privately and free from the oversight, inefficiencies and delays of the court system). I’m not sure you can put a price tag on reducing your loved ones stress during a time of grieving; but if you could, it would be certainly be worth far more than $2,000-$3,500.
What About a DIY Living Trust?
Going the do-it-yourself (DIY) route can save money on the front end. The risk, however, is that any problems will not arise until after you have died. By then, fixing those problems (if it's even possible to fix them) will typically far outweigh the costs saved, and it is likely that a court will have to get involved to help clean things up. But let’s nevertheless explore some of the options you are likely to encounter in the DIY space.
If you use a popular do-it-yourself website like LegalZoom, you can prepare the basic documents, including a property deed for transferring your home to your Trust, for $700-$750 after you add it all up.
Let me start by saying that there are a lot of things about LegalZoom that I like, including the ability to create property deeds for transferring real estate into the Living Trust, which some other services avoid. They also offer some limited independent attorney support through a network via a pre-paid plan that your renew annually.
Keep in mind however that LegalZoom’s disclaimers specifically warn you of the following:
At no time do we review your answers for legal sufficiency, draw legal conclusions, provide legal advice, opinions or recommendations about your legal rights, remedies, defenses, options, selection of forms, or strategies, or apply the law to the facts of your particular situation. LegalZoom is not a law firm and may not perform services performed by an attorney. LegalZoom, its Services, and its forms or templates are not a substitute for the advice or services of an attorney.
If you are really looking to protect your loved ones with your Living Trust and estate plan (which obviously you are), those disclaimers should be a cause for serious concern. In my opinion, LegalZoom offers more than most DIY services (and their price point reflects it), but you are still really doing the bare minimum. If the plan falls short in some way because of the limitations embedded in the service, your loved ones are going to feel it down the line.
The American Bar Association has actually created a special task force to evaluate the use of DIY estate planning methods such as LegalZoom and has concluded that these offerings lull clients into a false sense of security.
Despite the many concerns surrounding DIY estate planning, new players enter the marketplace all the time claiming to have the best and easiest solution available. In fact, I just received a message on LinkedIn last week with a job solicitation for a tech startup that is building an estate planning offering. The market is full of companies wanting a piece of the estate planning pie.
Trust & Will Review
One of the relatively newer players to the scene, Trust & Will, offers a Living Trust package for $399-$499. However, unlike LegalZoom, their service does not offer the ability to include the property deed needed to transfer your home or other real estate to your Trust. It’s not listed as an option on their website, and I personally had a chat with a customer service representative to confirm that they do not provide assistance with the necessary property deeds for transferring real estate. Therefore, you’re left on your own to make sure your home or any investment property is owned by your Trust. In my opinion, the inability to create a property deed represents an epic failure of the efficacy of this service. In my opinion, since all you are really going to get here (substance-wise) are the basic forms, you'd be better off saving your money and just going with some of the more inexpensive forms software out there. It just doesn't make sense to spend $400-500 for the forms alone. Either go cheap, or spend a little more and actually get the job done right.
Nevertheless, Trust & Will just recently received $6 million in funding to pump largely into advertising and marketing, so expect to hear more from them in the near future. The marketing sounds great, don’t get me wrong. But proceed at your own risk (truly). If you take the time to read the Terms and Conditions, here is what you will see on the Trust & Will website:
The law is a personal matter, and no general information or legal tool like the kind we provide can fit every circumstance. We do not review the Document Materials or any information you input for accuracy or legal sufficiency, draw legal conclusions, provide legal advice or apply the law to the facts of your particular situation. You understand that our providing of the Services to you is neither legal advice nor the practice of law, and that the Document Materials are not customized to your particular needs.
The above disclaimer is so common among these websites and underscores the truth behind these types of offerings: It’s a solution that, while better than nothing, largely gives its customers a false sense of security.
Are There any Safer, Lower Cost Alternatives to Prepare a Living Trust?
There absolutely are. Some law firms offer cutting edge alternatives to fill the gap between the traditional attorney model and the risky DIY route. My law firm is one of them. We offer virtual service options, such as our Foundation Package, that include complete advice, guidance, and all of the same documents you would receive through a traditional face-to-face law firm process, but for about half of what you would ordinarily expect to pay.
We accomplish that result that by working with you virtually through our comprehensive online interview, and following it up with personal consulting via video call, phone and email. Once everything is complete and approved by you, you will sign your documents with our instructions and return any property deeds to us for recording.
Our online interview is much more comprehensive than the DIY websites, and you will receive a true relationship with an experienced estate planning attorney to personally fine tune and customize everything for your individual situation.
Basically, everything the DIY websites specifically disclaim, we include.
And, yes, I realize that I may be a bit biased here. However, I have been studying and following the topic of DIY offerings and virtual estate planning for 12 years now (even wrote a blog post about it back in 2009) and specifically designed our offering to pick up where the others fall short.
If you’d like to learn more, you can review all of our Living Trust packages here.