What It Costs to Set up an Asset Protection Trust

An asset protection trust can be an effective strategy to safeguard your wealth from creditors, lawsuits, or other financial risks. However, one key consideration when establishing an asset protection trust is the cost involved.

Initial Setup Costs

The first expense you’ll encounter is the cost of establishing the trust itself. Setting up an asset protection trust isn’t something you can handle without professional assistance, as these trusts involve complex legal structures. In Florida, the cost for drafting an asset protection trust typically ranges from $5,000 to $15,000. This fee covers the work involved in drafting the trust document, reviewing your financial situation, and ensuring that the trust is compliant with both Florida law and federal regulations.

The variation in pricing depends on the complexity of your estate and the level of customization required for your trust. Some people may need additional trust structures or legal strategies to fully protect their assets, which can increase the legal fees. It’s essential to work with an experienced estate planning attorney familiar with Florida law to ensure that the trust is properly drafted and executed.

Funding the Trust

Once the trust document is drafted and signed, the next step is funding the trust. This means transferring assets—such as real estate, bank accounts, and investments—into the trust. The costs associated with funding an asset protection trust are separate from the initial legal fees and depend on the types of assets being transferred.

For real estate, you’ll likely need to pay for new deeds to transfer property into the trust, which can cost several hundred dollars in recording fees, title search fees, and potential attorney fees for preparing the documents. Moving financial accounts into the trust might involve minimal or no fees, depending on the financial institution, but the process itself is time-consuming and may require additional legal oversight.

Trustee Fees

An important part of setting up an asset protection trust is choosing a trustee who will manage the trust’s assets. Often, individuals opt for a professional or corporate trustee, especially in the case of irrevocable trusts, which are commonly used for asset protection.

Hiring a corporate trustee typically involves ongoing fees that range from 0.5% to 1.5% of the assets under management. For example, if your trust holds $1 million in assets, you could pay anywhere from $5,000 to $15,000 per year in trustee fees. These fees cover the administration, management, and distribution of the trust’s assets, and ensure that the trustee adheres to their fiduciary duties.

Some people choose a family member as trustee, which may lower costs, but professional trustees bring expertise in managing trust assets and navigating legal responsibilities, which can be particularly important for asset protection trusts.

Ongoing Maintenance and Legal Fees

After the initial setup and funding, there are ongoing costs involved in maintaining an asset protection trust. Florida law is complex, and trusts need to be regularly updated to comply with changing regulations or adapt to your evolving financial situation. This can involve periodic reviews by your attorney to ensure that the trust is functioning as intended and still provides the necessary asset protection. You may also need to file separate tax returns for the trust, which can incur additional accounting fees.

Legal fees for ongoing trust management vary but are typically charged on an hourly basis or through a flat retainer. These costs can range from a few hundred to several thousand dollars per year, depending on the complexity of your trust and how often you need to consult with your attorney.

Conclusion

Setting up an asset protection trust in Florida is a worthwhile investment for those looking to protect their assets from creditors and legal claims, but it does come with significant costs. Between the initial legal fees, funding expenses, trustee fees, and ongoing maintenance, the total cost can add up quickly. However, the protection and peace of mind that come with having your assets securely held in trust often outweigh these expenses.

About the Author

Gideon Alper is an attorney who specializes in asset protection planning. He graduated with honors from Emory University Law School and has been practicing law for almost 15 years.

Gideon and the Alper Law firm have advised thousands of clients about how to protect their assets from creditors.