How Much Does It Cost to Set Up a Trust in New York?

An essential step in estate planning is establishing a trust in New York, as this gives people a way to secure their assets, bypass the probate process, and transfer access to loved ones with peace of mind. While many New Yorkers are aware of the benefits of setting up a trust, they commonly ask, “How much does it cost to set up a trust in New York?”

Factors That Affect the Cost of a Trust in New York

Unfortunately, there is no widely available data regarding the average cost of setting up a trust in New York state. By understanding the multiple factors that contribute to creating trust in New York, such as ongoing administrative costs, legal fees, and estate complexity, people can make informed decisions about their future and their legacy. Significant factors that impact the cost of a trust include:

1. Type of Trust: The trust type that you decide to establish significantly influences the overall cost. An experienced estate planning attorney may recommend that you set up one or more of the following:
   • Revocable Trust: These trusts, also referred to as living trusts, give you the option to keep control of your assets while you are alive and revoke or modify the trust if you need to. As a general rule, revocable trusts are less expensive to both setup and manage.
   • Irrevocable Trust: Once an irrevocable trust is created, it cannot be altered. Establishing such a trust involves a dramatic relinquishing of assets, which requires more legal documentation and planning and sometimes leads to higher legal costs. These types of trusts can provide greater protection from taxes and creditors.
   • Specialty Trusts: Examples of specialty trusts include charitable trusts, spendthrift trusts, business trusts, and special needs trusts. Specialty trusts tend to be more complex in nature, or they may come with more legal fees associated with set up and management.

   As each type of trust comes with varying levels of needed legal experience and documentation, this can significantly influence the overall cost. A skilled trust attorney can help you determine what is the optimal trust for your current situation.

2. Attorney Fees: One of the more significant expenses involved in setting up a trust in New York is hiring an estate planning attorney. New York attorneys may base their pricing on the complexity of the trust, the location of the firm, and their experience level. Some attorneys may work by the hour, while others may charge a flat fee for creating a trust. Considering that New York State has a median household income of $76,000, people should seriously consider working with a skilled attorney with experience in trust law to ensure that they efficiently meet all of their estate planning goals.
3. Administration and Maintenance Costs: After a trust is created, ongoing management and maintenance are required. The cost of trust administration could involve trustee fees if a professional trustee, such as a legal entity or bank, is hired. Additionally, as some types of trusts require annual financial reporting or tax filing, this could require payment for accounting services. If a tax professional is involved in tax-saving strategies, this could also add to the overall costs of the trust.
4. Asset Transfers and Funding the Trust: A trust is not effective if it does not have adequate assets transferred to it. Individuals placing real estate property into their trust may be required to pay for reporting fees, deed preparation, and a title search. With the median home price in New York at $400,000, a real estate transfer can come with considerable legal and administrative overhead. Transferring other types of assets, such as investment accounts, businesses, and personal property, can also incur additional costs.
5. Court and Filing Fees: Although the majority of trusts do not involve the courts, there are particular situations that could arise involving legal proceedings or court filings. For example,

Why Is Setting Up a Trust in New York Worth It?

Despite all the costs involved with establishing a trust, having one can come with significant tax benefits and financial protection. A trust allows for a more efficient, private, and secure transfer of assets, ensuring that beneficiaries receive the resources they need to thrive. Considering that 40% of New Yorkers have a bachelor’s degree or higher, many people choose trusts as a way to strategically manage their generational wealth.

FAQs

Q: What Factors Influence the Cost of Setting Up a Trust in New York?

A: Factors that can influence the cost of setting up a trust in New York include lawyer fees, administration and management costs, expenses associated with asset transfers, the type of trust, and, potentially, court fees. More complex types of trust, such as special needs trusts or irrevocable trusts, are typically associated with higher costs.

Q: Are There Any Ongoing Costs Associated With a Trust?

A: Yes, multiple ongoing costs are typically associated with the trust, such as trustee fees, asset management costs, and accounting and tax preparation expenses. Depending on your situation, you may need to hire a trust manager to oversee and administer the trust, ensuring assets are managed and distributed according to the trust’s terms and the beneficiaries’ best interests.

Q: How Does Funding a Trust Impact the Cost?

A: Funding a trust involves transferring assets into it, which can impact costs depending on the trust type and complexity. For a revocable trust, funding is typically straightforward with minimal cost, mainly legal fees for drafting and asset transfer. Irrevocable trusts may incur additional expenses, like taxes or appraisals, especially for high-value or complex assets, potentially increasing overall administration costs.

Q: Does New York Charge an Estate Tax That Can Be Avoided With a Trust?

A: Yes, New York charges an estate tax that is applied to estates that exceed a specific threshold. Although revocable trusts are not able to help New Yorkers avoid estate tax liability entirely, there are certain types of irrevocable trusts that can be adequately leveraged to ensure the minimization or elimination of estate taxes. Seek advice from a qualified trust attorney.

Learn More About the Estate Planning Process With a Skilled New York Trust Attorney

The time to plan your estate is now. Life is full of unexpected events. Having your wishes detailed and clarified early reduces the stress for everyone involved. Contact a skilled attorney from Greco Law, P.C. today to learn more about how we can help you ensure a seamless transfer of wealth to your loved ones.