Setting up an irrevocable trust can help you remove property from your possession and potentially avoid estate and gift taxes in the future. An irrevocable trust is an estate planning entity that typically cannot be altered once set up. While setting up this type of trust can prove productive, it can also prove costly. You'll most likely need to spend a fair amount of money to set up an irrevocable trust.
One of the ways you could potentially create an irrevocable trust is with a trust kit. These are sold as software packages or books that include forms. Using one of these kits, you can complete the creation of the trust with no outside assistance and spend as little as $50 or as much as $500. If you take this route, make sure you purchase a kit that takes the laws of your state into consideration.
Video of the Day
Estate Planning Attorney
Another approach is to hire an estate planning lawyer. When you hire this type of lawyer to help you draft an irrevocable trust, you must invest considerably more. For a simple irrevocable trust, you could expect to pay $900 on the low end for legal fees. For more complicated trusts, you can expect to pay as much as $3,500 to an estate planning attorney.
When creating an irrevocable trust, you should also factor in the time required. Regardless of which method you use to create it, you must deal with a significant time investment. You need to take the time to meet the lawyer and go over your entire estate or to sit down and use your trust kit. This could result in lost work time and, therefore, lost income.
In some cases, you must also pay money to transfer ownership of your property into the irrevocable trust. For example, if you plan to transfer real estate into the trust, you must pay transfer fees. You may also need to do the same thing if you transfer a car into the trust. These fees tend to range from $20 to $100 for each transaction, which can add up if you have a large amount of property or other items to transfer.