How To Avoid Maintenance Fee Trust
Here are some ways to minimize or avoid ongoing trust fees, depending on the type of trust and trustee arrangement:
How to Avoid or Minimize Trust Maintenance Fees
- Choose a Family Member or Friend as Trustee
- Professional trustees (banks, trust companies, attorneys) charge fees—often 1% or more of trust assets annually.
- A trusted family member or friend acting as trustee may not charge fees or may charge much less.
- Use a Simple Trust Structure
- Complex trusts with many provisions often require ongoing legal or accounting services, increasing fees.
- Simpler trusts can reduce administrative costs.
- Limit the Scope of Trustee Duties
- Clear and straightforward trustee instructions can reduce time and expenses.
- Avoid requiring frequent accountings or complex investments.
- Negotiate Trustee Fees
- If using a professional trustee, you might be able to negotiate lower fees upfront.
- Consider a Revocable Living Trust
- While these may have setup costs, ongoing fees can be low, especially if you serve as trustee.
- They may avoid probate, saving costs overall.
- Use Trusts Only When Necessary
- Sometimes, simpler estate planning tools (like beneficiary designations or joint ownership) may achieve your goals with fewer fees.
- Review and Plan for Tax and Accounting Costs
- Trusts may require annual tax filings, which can add costs.
- Choosing a trust structure with simpler tax filings can reduce expenses.
