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How Much Does It Cost to Set up an Irrevocable Trust? 

Setting up an irrevocable trust can be a smart financial move, but it comes with its costs. Whether you're looking to protect your assets, minimize estate taxes, or become eligible for certain government programs, the expenses can vary widely. On average, setting up an irrevocable trust can cost between $2,000 to $20,000. This range includes legal fees, trustee fees, and other professional fees, depending on the complexity of the trust and your specific needs.

Legal fees are a significant part of the cost, and they can either be a flat fee or an hourly rate. Alongside these, there may be fees for drafting documents, transferring assets, and managing ongoing administration. Highly complex trusts tend to be on the higher end of the cost spectrum, often seen with wealthy estates, which might require specialized legal advice.

Other professional fees may include those from financial advisors or tax consultants, who help in maintaining the trust and ensuring it adheres to all regulations. Funding the trust, i.e., transferring assets into it, can also add to the total expense.

Key Takeaways

  • Setting up an irrevocable trust typically costs $2,000 to $7,000.
  • Legal and professional fees are primary cost factors.
  • Complexity and specific needs influence overall expenses.

Understanding Irrevocable Trusts

An irrevocable trust is a legal arrangement that cannot be changed or terminated without the permission of the beneficiaries.

Once assets are added to an irrevocable trust, the grantor gives up control over them. This provides certain benefits but also comes with some restrictions.

Key Features of Irrevocable Trusts:

  • Permanent: Cannot be modified after creation.
  • Asset Protection: Offers protection from creditors and lawsuits.
  • Tax Benefits: Can reduce estate taxes.

Types of Irrevocable Trusts

There are various kinds of irrevocable trusts, each serving a different purpose. Some common types include:

  • Bypass Trusts: Help married couples reduce estate taxes.
  • Charitable Trusts: Allow a portion of the estate to go to charity.
  • Life Insurance Trusts: Remove life insurance from taxable estate.

Uses of Irrevocable Trusts

Irrevocable trusts have multiple uses, including:

  • Minimizing Estate Taxes: Assets in the trust are not considered part of the taxable estate.
  • Qualifying for Benefits: Helps individuals qualify for government programs, such as Medicaid.
  • Asset Protection: Shields assets from creditors and legal claims.


Creating an irrevocable trust involves costs which can range from $2,000 to $5,000 for a domestic irrevocable asset protection trust and $5,000 to $20,000 for an offshore irrevocable asset protection trust. These costs go up depending on complexity. 

Benefits of Setting Up an Irrevocable Trust

An irrevocable trust offers key benefits for those seeking to manage their assets efficiently.

Asset Protection: Placing assets in an irrevocable trust protects them from creditors and legal judgments. This ensures that the assets are secure and preserved for the beneficiaries.

Tax Advantages: Irrevocable trusts can provide significant tax benefits. By moving assets into the trust, the grantor can reduce the overall value of their estate. This can help minimize estate taxes.

Eligibility for Government Programs: Assets in an irrevocable trust are not typically counted towards eligibility for government assistance programs. This can help individuals qualify for benefits such as Medicaid.

Avoiding Probate: Unlike a will, an irrevocable trust allows assets to bypass probate. This can lead to quicker and more private distribution of assets to beneficiaries.

Control Over Asset Distribution: Even though the grantor gives up control, they can still set specific terms for how and when assets are distributed. This can be particularly useful for providing long-term support for beneficiaries.

Preservation of Wishes: The trust ensures the grantor’s wishes are carried out even after they pass away. This provides peace of mind knowing that their intentions are maintained.

Setting up an irrevocable trust has its complexities, but the advantages make it a valuable tool for estate planning and asset protection.


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Cost Factors for Setting Up an Irrevocable Trust

Several factors influence the cost of setting up an irrevocable trust. 

Complexity of the Trust:
Trusts with more complex structures and specific objectives can be more expensive.

Attorney Fees:
Hiring an experienced attorney can significantly impact costs. Legal fees can vary widely based on the attorney's expertise and location.

FactorsCost Range
Basic Irrevocable Trust $2,000 - $5,000
Complex Trust Structures $5,000 - $25,000
Document Drafting $350 - Several Thousand Dollars

Geographic Location:
Costs can also vary depending on the region, whether it is within the US or overseas. Legal services in urban areas are generally more expensive.

Additional Fees:
Besides the initial setup, costs for drafting documents and transferring assets into the trust can range from $350 to several thousand dollars, as well as costs for a trustee and protector.

Number of Assets and Beneficiaries:
Managing and listing multiple assets or numerous beneficiaries can add to the complexity and overall cost of the trust.

Ongoing Maintenance:
There may be annual fees for maintaining the trust, although these are usually less than the setup costs.

Trustee Fees

Trustee fees can vary widely depending on different factors.

In general, trustee fees tend to be between 1% and 1.5% of the estate's value. For larger estates, the percentage might be lower.

Some firms charge a minimum annual fee. This protects them against extensive work for small estates.

For example, a trustee managing a $200,000 estate at 1% might charge $2,000 annually.

Alternatively, many trustees charge a flat fee. If the trust doesn't require much hands-on management, a flat fee might be more practical which is the case for many overseas trusts.

Example Trustee Fees

Estate ValuePercentage FeeAnnual Fee
$100,000 1.5% $1,500
$500,000 1.2% $6,000
$1,000,000 1% $10,000

Individual trustees might charge less compared to institutions like commercial banks. Personal trustees may ask for a lower fee due to less overhead.

Choosing the right fee structure is crucial. It should reflect the amount of work and the size of the estate.

Other Professional Fees

When setting up an irrevocable trust, there are various professional fees one might encounter.

Attorney Fees

Engaging an attorney to assist with drafting the trust documents is common. Attorney fees can range from $1,000 to $5,000 or more, depending on the complexity of the trust.

Financial Advisor Fees

Working with a financial advisor ensures the trust aligns with overall estate planning goals. These fees vary. Some advisors charge a flat fee, while others charge a percentage of assets managed, often a financial advisor might be apart of the company establishing the trust or might be apart of a family office.

Document Preparation Fees

Transferring property and assets into the trust requires precise documentation. The cost for this service ranges from $350 to several thousand dollars, depending on the extent and nature of the assets being transferred.

Miscellaneous Fees

Other possible fees include:

  • Notary Fees: For notarizing documents, typically $10-$50.
  • Filing Fees: For recording documents with the county, ranging from $50 to $200.

Understanding these costs will help manage expectations when setting up an irrevocable trust.


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Determining the Complexity of the Trust

The complexity of an irrevocable trust can vary widely. Key factors include the type of assets involved, the number of beneficiaries, and any special provisions that need to be included.

Type of Assets

The nature of the assets placed in the trust can significantly impact its complexity. Real estate requires appraisals and proper titling. Financial assets, such as stocks and bonds, may need valuations and transfer procedures. Personal property like artwork or collectibles often needs detailed documentation to ensure accurate value and management.

Retirement accounts can also add complexity due to tax considerations. Each asset type has unique legal and administrative requirements that must be addressed to ensure the trust operates effectively and in compliance with relevant laws.

Number of Beneficiaries

The number of beneficiaries influences the complexity of an irrevocable trust. When several beneficiaries are involved, managing distributions becomes more complicated. Each beneficiary may have different needs, which can require tailored distribution plans.

Clear instructions must be outlined to avoid conflicts. Provisions for minors or individuals with special needs further increase complexity, necessitating careful planning to protect their interests while complying with legal requirements. Distribution timelines and conditions add administrative tasks, making the trustee's job more challenging.

Special Provisions

Special provisions may include specific instructions for assets or beneficiaries. Discretionary trusts let trustees decide when and how to distribute assets, adding a layer of judgment and complexity.

Spendthrift clauses prevent beneficiaries from mismanaging their inheritance. Trusts with charitable components may have rules for the timing and amount of contributions. Generation-skipping provisions aim to benefit grandchildren, requiring careful planning to navigate tax laws. Each special provision demands detailed legal language and careful enforcement, ensuring the trust meets its intended goals without unintended consequences.

Funding the Trust

Setting up an irrevocable trust involves careful planning to ensure that the trust is properly funded. This process includes initiating the funding and evaluating and transferring assets.

Initial Funding Process

Funding an irrevocable trust begins with establishing the trust account. Once the legal documents are in place, the trustees need to transfer assets into the trust. Typically, the initial funding might involve moving cash or securities into the trust account.

To avoid legal complications, it is advisable to work with an attorney or a financial advisor. They can assist with the correct documentation and ensure compliance with state laws. Besides cash, other assets such as stocks, bonds, and real estate can be transferred into the trust. This initial step secures the trust and helps in managing and protecting the assets effectively.

Asset Evaluation and Transfer

The next crucial step involves evaluating the assets intended for the trust. Trustees must determine the current value of assets like real estate, business interests, and valuable personal property. This valuation process helps in understanding the worth of the trust and ensuring appropriate asset allocation.

After evaluation, the legal transfer of these assets into the trust is essential. This may include retitling properties, updating beneficiary designations, and moving investments. Accuracy in transferring these assets is critical to avoid legal issues and ensure the trust operates as intended.

Consulting with professionals during this process can mitigate errors and provide peace of mind. Proper asset transfer secures the trust's ability to achieve its intended purpose, such as protecting assets or minimizing estate taxes while ensuring the trustees adhere to the legal requirements.

Maintaining an Irrevocable Trust

Maintaining an irrevocable trust involves several key tasks. These responsibilities ensure the trust remains compliant with legal and financial regulations.

Regular Review of Assets: The trustee must regularly review the assets within the trust. This includes checking their performance and ensuring they align with the trust's goals.

Filing Taxes: The trust may need to file its own tax returns. The trustee is responsible for making sure this happens on time to avoid penalties.

TaskFrequencyResponsible Party
Asset Review Annually Trustee
Tax Filing Annually Trustee/Accountant

Communication with Beneficiaries: The trustee should keep beneficiaries informed about the trust's status. This can include providing annual reports and updates on any changes.

Record Keeping: Maintaining accurate records is crucial. This includes documenting all transactions, communications, and decisions related to the trust.

Legal Compliance: The trustee must ensure the trust complies with all relevant laws. This can involve consulting with legal professionals to stay updated on any changes in legislation.

Monitoring Investment Performance: Part of maintaining the trust is ensuring that investments are performing well and adjusting as needed.

Using these practices, trustees can effectively manage and maintain an irrevocable trust.

Avoiding Common Pitfalls

Establishing an irrevocable trust involves several steps and considerations. It is essential to avoid common mistakes to ensure the trust serves its intended purposes effectively.

Choosing the Right Trustee

Selecting an appropriate trustee is crucial. The trustee manages the trust, making significant decisions about asset distribution and investments. It is important to choose someone trustworthy, financially savvy, and capable of impartial decision-making.

A family member might be a natural choice but consider potential conflicts of interest. Professional trustees, like a bank or trust company, offer expertise and neutrality but come with higher fees. Balance trustworthiness, expertise, and costs when making this decision.

Regular Reviews and Compliance

Once established, it is essential to regularly review the trust to ensure it complies with current laws and aligns with the grantor's wishes. Laws and personal circumstances can change, so periodic check-ins are necessary.

Work with legal and financial advisors to review the trust. Ensure all assets are properly titled in the trust’s name and any changes are documented. Staying proactive helps prevent legal issues and ensures the trust remains effective. 

Get in Touch to See if a Trust is For You

Setting up an irrevocable trust can be an important step in estate planning. The costs involved can vary widely based on several factors.

Before deciding, it's important to consult with legal professionals to ensure that the trust meets your specific needs, whether for tax planning, eligibility for government programs, or asset protection.

Understanding the full scope of costs and benefits will help in making an informed decision. We at Offshore Protection can help you at every step of the way.

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***Please Note: If you are a resident of a country that is a signatory of the Common Reporting Standard (CRS) (or a US citizen) your tax reduction possibilities are limited. Due FATCA, CRS, and CFC laws you may not be able to completely eliminate your taxes without moving your residence. While opening an offshore company can increase privacy and asset protection, your tax obligations remans tied to your ownership of overseas entities. Offshore company's are often not taxed in the country where they are incorporated, rather you as the owner are obligated to pay taxes in the country where you reside. Please make sure you know your tax obligations, as we are not tax advisors. Please seek a local tax professional for help regarding your situation. 

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