Will Trust costs

[GingerMunky]

I am trying to work out some indicative ongoing costs for will trusts, i.e. after death and the assets transfered to the trust.

I assume there is an ongoing cost from a solicitor for annual filling?

And then what would appropriate costs for other activities like issuing a loan?

I appreciate this is a bit of how long is a bit of string, but has anyone setup one of these and got a 'rate card' of costs?

[TownIdiot]

It's really difficult to say but it's generally covered by "not very cheap"

What I thought was a fairly standard family trust cost tens of thousands with annual fees in the thousands before any specific requests
Probate cost a fortune.

[GingerMunky]

TownIdiot said:

It's really difficult to say but it's generally covered by "not very cheap"

What I thought was a fairly standard family trust cost tens of thousands with annual fees in the thousands before any specific requests
Probate cost a fortune.

Wow, that's expensive for standardised admin! Thought those costs were for family trusts with multiple beneficiaries, variety of asset types and complex guidelines for trustees.

[Panamax]

GingerMunky said:

I am trying to work out some indicative ongoing costs for will trusts, i.e. after death and the assets transfered to the trust?

"Trust" is a great word. Trusts are mostly used by people who don't trust their own family.

The big question is always, who will be the Trustees? And if you don't trust your family it won't be them. So you appoint the solicitor, or whoever, as Trustee and he/she's pleased as punch to charge £350 an hour for minor administrative tasks. Although, of course, the burden of responsibility to "respect your wishes" weighs heavily on his/her shoulders....

[GingerMunky]

Panamax said:

"Trust" is a great word. Trusts are mostly used by people who don't trust their own family.

The big question is always, who will be the Trustees? And if you don't trust your family it won't be them. So you appoint the solicitor, or whoever, as Trustee and he/she's pleased as punch to charge £350 an hour for minor administrative tasks. Although, of course, the burden of responsibility to "respect your wishes" weighs heavily on his/her shoulders....

Good point I should have clarified the intention here. Firstly, I have a close friend (professional but not legal) who will be the trustee, and I was looking for the costs from associated with a legal professional who would be the second trustee. Secondly, the trust bit is less about trust and more about protection of assets i.e. if one of my children was to married they could get a loan from the trust to jointly purchase a property and this would be paid back before any divorce settlement.

So you are right; it is the people I don't know that I don't trust, rather than my family, who will be the beneficiaries.

[TownIdiot]

That will need a serious sit down with a tax professional as well.

Quite complex tax implications in creating family trusts.

[Panamax]

That's interesting.

Why does this "friend" want to be a trustee? It's a thankless task. And the friend will be jumped all over by the "professional" co-trustee who will be more cautious than a cautious thing that's cautious, while charging in 10 minute segments.

These things are all matters of personal judgment. I would simply say, proceed with caution.

N.B. The tax treatment of trusts looks to me like "easy pickings" for Rachel Reeves and her successors; second only to the BTL crew who are already being milked by the Chancellor and probably have more pain to come.

[aaron-j9c9a]

Trusts are a lot of faff.
We have a family trust and it’s turned out to be nothing but a headache and an expensive one at that.

Make sure you really trust the trustee, our trustee was someone everyone thought they could trust but we’ve found out the hard way. Money changes people after death.

Trusts are not cheap. Fees eat into the funds more than you will realise.

[LooneyTunes]

GingerMunky said:

Wow, that's expensive for standardised admin! Thought those costs were for family trusts with multiple beneficiaries, variety of asset types and complex guidelines for trustees.

Nobody is going to be able to give a sensible cost without knowing the specifics of what exactly you want to achieve.

There is a huge spread of cost between something that is intended to be of limited life (e.g.until children reach a certain age, etc). At the more extreme end you can have arrangements intended to run for extended periods, even with businesses owned by one or more Trusts.

GingerMunky said:

Good point I should have clarified the intention here. Firstly, I have a close friend (professional but not legal) who will be the trustee, and I was looking for the costs from associated with a legal professional who would be the second trustee. Secondly, the trust bit is less about trust and more about protection of assets i.e. if one of my children was to married they could get a loan from the trust to jointly purchase a property and this would be paid back before any divorce settlement.

So you are right; it is the people I don't know that I don't trust, rather than my family, who will be the beneficiaries.

You can go down a rabbit hole with some of this stuff but the above, along with ensuring that death of either myself or MrsLT doesn’t result in our kids being stripped of their inheritance by a future replacement spouse who then out survives and pushes the money to their kids, was the main reason for pushing money and assets into trusts.

It’s up to you whether you start with the lawyers or the accountants (personally I tend to do the former as I find them easier to manage and a bit less prone to wanting to involve every single specialist team they have). Costs aren’t automatically going to be high, but could be. The more complex you make it, and the more work you make them do, the more expensive it will be.

Lastly, don’t forget the operational side of things:

Make it complex and things you might expect to be simple turn out to not be necessarily so. For example, banking gets more difficult to open accounts due to AML/CTF/etc. Some banks will simply say no. Others you might need to navigate your way to the right part of the bank to make it work.

Similarly, to take your example of the Trust providing some of the money for a house purchase, are you sure that it will work in practice? Have you checked that a general mortgage lender will happily sit alongside the Trust as another lender (with the latter doubtless also wanting security/charge over the asset)? Would the Trust need to be subordinated (or even go naked) vs the mortgage co to make it work? If so, are you OK with that and going to make provisions for this in the Trust deeds to avoid later rework/confusion? As will be apparent, there are things there that you’d want to bottom out before incurring significant costs actually establishing a structure.

[GingerMunky]

Thanks all for your thought and comments, very useful, much appreciated.

[TownIdiot]

GingerMunky said:

Thanks all for your thought and comments, very useful, much appreciated.

It's one of those things that on the face of it seems pretty straightforward but when you get into the weeds it's really pretty complex. Which is why it gets expensive

[LooneyTunes]

TownIdiot said:

It's one of those things that on the face of it seems pretty straightforward but when you get into the weeds it's really pretty complex. Which is why it gets expensive

It doesn't have to be outrageously expensive though. Whoever is writing/wrote the wills may be able give some cost indications.