Fee for setting up trusts

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
GeauxBR
Posts: 113
Joined: Mon Sep 12, 2011 10:53 pm
Location: Baton Rouge

Fee for setting up trusts

Post by GeauxBR » Wed Apr 06, 2016 1:14 pm

My in-laws went to a seminar/luncheon this week put on by Paul Rabalais (author of: http://www.amazon.com/Estate-Planning-L ... 0979398207 ) which i think i have seen linked here before. Anyway, i told them i'd post here and see if $5k was a reasonable amount to setup a trust for everything after their passing. I think it would be a trust for all of their assests, and an "irrevocable trust for medicaid". The $5k covered any future amendments of the trust.

Is this a reasonable cost?

NMJack
Posts: 836
Joined: Sun Feb 14, 2016 1:22 pm

Re: Fee for setting up trusts

Post by NMJack » Wed Apr 06, 2016 2:04 pm

I obtained prices from three different attorneys for complete estate plans (living wills, medical and financial POA, trusts, etc.) and they were all between $4K and $5K. That said, they didn't all operate the same. Be careful of the "assembly line" approach. Some firms use a rigid one size fits all AB Living Trust based model that spits out a huge stack of paper that will take you months to read through. You might not even know what you really bought until somebody passes away. Neat business model, but not what I needed.

smackboy1
Posts: 998
Joined: Wed Mar 14, 2007 9:41 pm

Re: Fee for setting up trusts

Post by smackboy1 » Wed Apr 06, 2016 3:00 pm

GeauxBR wrote:My in-laws went to a seminar/luncheon this week put on by Paul Rabalais (author of: http://www.amazon.com/Estate-Planning-L ... 0979398207 ) which i think i have seen linked here before. Anyway, i told them i'd post here and see if $5k was a reasonable amount to setup a trust for everything after their passing. I think it would be a trust for all of their assests, and an "irrevocable trust for medicaid". The $5k covered any future amendments of the trust.

Is this a reasonable cost?
You're focusing on the wrong thing. $5K might be a great price if the advice and plan is well thought out and prepared for your in-laws specific needs. Or $5K could be a complete rip off for a poor plan put together without much thought to your in-laws actual needs. To be honest, the free lunch seminar thing makes me go "Hmmmmmm :? " But salesmanship aside, this could be an experienced and reputable estate planning law firm and the estate plan for them might be excellent - or not. A bit more homework is required on your in-laws part. Maybe read up on estate planning and see if the recommended plan makes sense.

The better question is are your in-laws best served by this particular estate plan involving 2 trusts? Trusts are just one tool of many. There are many different types of trust for different purposes. Sometimes it's a good tool to use, other times it's not. There are unscrupulous trust mills that do nothing but churn out cookie cutter trusts whether they are needed or not. Another idea is to get a second opinion from another experienced estate planning lawyer.
Disclaimer: nothing written here should be taken as legal advice, but I did stay at a Holiday Inn Express last night.

bsteiner
Posts: 3479
Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Re: Fee for setting up trusts

Post by bsteiner » Wed Apr 06, 2016 3:04 pm

If you go to the free dinner seminar, and you're the one who buys the annuity, the living trust, the timeshare, or the bridge, not only did you pay for your free dinner, but you paid for the free dinners for everyone else in the room.

drosselmeyer
Posts: 13
Joined: Thu Dec 11, 2014 8:27 pm

Re: Fee for setting up trusts

Post by drosselmeyer » Wed Apr 06, 2016 3:12 pm

Smackboy is right - it's like asking if $1,000 is too much for a suit. What suit are we talking about - is it from JC Penney or Versace, what fabric did they use, is canvassed or fused? That tells you if it is an appropriate value for the price. Then the question is whether it is too much suit for your needs - are you wearing it once for a funeral or will you wear it weekly for years? Do you need a $1,000 suit or would a $200 suit do the job? I'd be extremely wary of anyone charging a flat fee that would include any modifications that are needed in the future. I'm an attorney, and I'd never agree to something like that. That's like a contractor saying I'll charge you a flat fee to build you a house and any extra rooms that you might need added on to it in the future. Either I'm way overcharging you on the front end (think Best Buy - do you want to buy the insurance policy for that calculator for $29.99), not really planning on doing any modifications for you, or planning to go bankrupt.

homermtb
Posts: 26
Joined: Tue Jul 15, 2014 11:26 pm

Re: Fee for setting up trusts

Post by homermtb » Wed Apr 06, 2016 3:53 pm

I'm going through the process myself for a moderately complex trust (at least by my standards). I received quotes for $3500-$5000. What I'm finding, however, is that these are ballpark figures and it's the extra questions/clarifications/emails that seem to be endlessly adding to my bill. Trying to get a simple yes/no answer seems to be impossible. Good Luck!

Nowizard
Posts: 1542
Joined: Tue Oct 23, 2007 5:33 pm

Re: Fee for setting up trusts

Post by Nowizard » Wed Apr 06, 2016 4:00 pm

We had healthcare documents, living will and Revocable Trust documents completed for $1,100 eight years ago. We priced attorneys from large groups, and they were considerably more. We chose an attorney who was set up on one of those floors of one-person offices who specialized in this area. With today's software and a good questionnaire, attorneys can complete accurate documents such as these for a relatively small charge, make money themselves and assure the consumer of quality completion of these important documents. Inquire around and you will find someone who will charge considerably less than 4-5K.

Tim

BHUser27
Posts: 633
Joined: Mon Jan 18, 2016 3:07 pm
Location: A Midwestern Town

Re: Fee for setting up trusts

Post by BHUser27 » Wed Apr 06, 2016 4:05 pm

A local reputable estate atty here (small-town midwest) quoted me between $1500 and $2000 for a revocable trust and funeral wishes. She has a very good reputation.

User avatar
Steelersfan
Posts: 3525
Joined: Thu Jun 19, 2008 8:47 pm

Re: Fee for setting up trusts

Post by Steelersfan » Wed Apr 06, 2016 4:37 pm

On principal, I would never choose a firm who's method of soliciting clients is to pay for 50 dinners and hope to get one or two serious prospects out of it.

quantAndHold
Posts: 1759
Joined: Thu Sep 17, 2015 10:39 pm

Re: Fee for setting up trusts

Post by quantAndHold » Wed Apr 06, 2016 5:18 pm

We got our fairly simple trust from a local attorney who specializes in wills and trusts. It was less than $1000, and the updates we do every 5 years or so have been $300 or so apiece.

A more complex trust would be, of course, more. But $5k as table stakes seems about 5x too high.

Spirit Rider
Posts: 8672
Joined: Fri Mar 02, 2007 2:39 pm

Re: Fee for setting up trusts

Post by Spirit Rider » Wed Apr 06, 2016 5:54 pm

You are asking the wrong question. The question is not whether the cost of the trust is worth $5K, but rather that the marketing method means there is no value at whatever cost.

Never buy a service/product where a substantial amount of the cost is in the marketing and not the service/product delivered. Do they really think that Paul Rabalais is going to be even slightly involved in the development of this trust.

In legal services like investments, underlying costs matter. You can be sure that with a seminar driven process, the trusts will be cookie cutter with very little input from the customer. High volume is what matters.

Now that is not to say that all lawyers are not also going to create the trusts based on templates. After all, you want something that is well vetted and will stand the test of time. However, how much work is being done to make sure that the trust options conform to your specific needs matters.

Have your in-laws find two or three credible local firms with some degree of track record and references. You should be able to get a free initial consultation/quotation. Consider this an interview of the lawyer and law firm.

Sometimes in the era of mass commercialization, local really is better.

c1over8
Posts: 193
Joined: Fri Apr 01, 2016 10:15 am

Re: Fee for setting up trusts

Post by c1over8 » Wed Apr 06, 2016 6:42 pm

5k is only reasonable if your in laws need complex planing. Do their assets exceed $10.86 million (5.43 current exemption times two and assuming they haven't use any of the exemption during life)? If not, 5k is too high unless there are some other complicating factors such as spendthrift or disabled children that necessitate special planning. If their assets exceed $10.86 million, they can likely still find a highly competent estate planning attorney that would do the work for less than 5k.

Post Reply