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Hidden costs of settling a trust

On Behalf of | Mar 6, 2023 | Estate Planning, Trust Administration |

One of the most popular misconceptions about trusts is that they’re inexpensive to manage, especially once the settlor dies. If you stand to benefit from a trust in San Diego, you should educate yourself about the “hidden” costs of settling the trust after the settlor dies. This ensures that you’re budgeting properly along the way.

Successor trustee costs

When the settlor passes away, the law requires that someone assumes their position at the head of the trust. The written trust agreement typically dictates these fees. However, if the written agreement doesn’t cover successor costs, state laws typically govern those costs.

The complexity of the trust, how much time the administration process will take, and various other factors determine the successor trustee’s fees. If anyone challenges the trusts, these fees will increase.

Specialty fees

Depending on the items held within the trust, you may be required to pay for certain specialty services. These specialty costs often include things such as business valuations. Accredited appraisers conduct official business valuations; these professionals often set their own fees.

Accounting costs

One of the most important aspects of calculating a trust’s accounting fees once the trustee has died involves the size and complexity of the trust. If the trust is small and owns 20 stocks, there won’t be a lot of accounting. Conversely, if the trust is large and has dozens of stocks, real estate investments, and other investments, the accountants who handle the process will require more money.

In addition to these costs, it’s important that you also consider the costs of sending important documents through the mail, storing property, and moving property from one place to another. Additionally, you must pay the executor of the trust.