AUBURN, California
This is the most common question we receive from clients on any subject. A common exchange is as follows:
Q: How much does a living trust cost?
A: $1,250 for a single person, $1,750 for a married couple.
Q: Are there any other fees?
A: If you have real estate property in addition to your residence, $75 for each extra deed plus the mandatory county recording fees.
Q: That’s it?
A: Yes, that’s it!
Of course, the price of a living trust varies from law firm to law firm. But living trust pricing generally factors the following fundamental economic considerations: (1) cost to produce; (2) market for the living trust at a specific price; and (3) desire/need to make a certain profit from producing living trusts. Despite many clients expressing surprise at the cost of our living trusts, (fortunately it is almost always a welcome surprise), we too have considered those factors to assess the price of our living trusts.
The cost to produce is mainly a matter of how much time a living trust takes to produce. As a starting point, a good deal of information must be collected from the client to understand that client’s particular needs and desires. Clients differ in the amount of time required to get the necessary information, some less, some more. Then there is the actual drafting of the documents, review, edits, and finalization of the documents. Lastly, it is important to review the information with the client, to ensure things are correct and that the client approves of the living trust terms. Our firm has closely examined the time it takes to produce a living trust for individual clients, and have factored this into our pricing.
The next factor, the market for living trusts at a specific price, varies widely. We have found that the market for high priced living trusts is quite vibrant. Of course, there are law firms catering to the very wealthy, who have many millions of dollars. However, we have found that the market for high priced living trusts for people who don’t have many millions of dollars thrives because clients simply are led to believe that that is what it costs. We often have clients coming to us from different law firms which provide high priced (perhaps overpriced) living trusts who were told that living trusts are just simply expensive. It is our position, however, that charging $10,000 to a client who has two children, one house, and intends to give the house to the two children, is an example of a law firm trying to make too much money. So why charge that much? That leads to the last factor.
The desire or need to make profit from living trusts is the last factor. Some law firms focus entirely on producing living trusts. If the only money coming in for the law firm is from living trusts, the need to make more money from each living trust increases. In other words, they put all their eggs in one basket. Also, a law firm that charges more for living trusts makes more profit. Sometimes substantially more. Clients who are led to believe that all living trusts are very expensive allow some law firms to not just profit, but profit substantially.
How do the three factors affect our firm? For us, the amount of time required to produce a quality living trust is high. A good deal of time is spent with the clients, determining needs and wants, as well as drafting and revising the actual documents. Next, we believe the market for more affordably priced living trusts is a growing market. As more potential clients learn that a living trust can be had for a fraction of the cost quoted by other law firms, we look forward to helping them with their living trust needs. The last factor is profit. At this point, the question might be asked, if the cost to produce is high, but the price of the living trust is low, do you make any profit? The answer is an emphatic yes. As with any business, some aspects of it bring in more money per hour spent than others. We are fortunate to have a diverse practice, so we do not have the same pressure as other law firms to make money from living trusts alone. Moreover, we have found that clients who come to us for a living trust also come back for their other legal needs. Thus, we can provide living trusts for clients at a fraction of the cost that other firms can.
In sum, we have found that we are able to produce quality, affordable living trusts after taking into account the three major factors. If a law firm quotes you $3,000 or more for a living trust, make sure you ask why it is so expensive. Are they truly able to provide you a service that justifies the expense, or are they making up reasons to make more profit? Then call us, to learn why we can provide you with a quality living trust for a fraction of the cost.
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The information in this blog is intended only as general information, and under no circumstances constitutes legal advice, nor does it create an attorney-client relationship. The information should not be relied upon as a substitute for specific legal advice concerning your particular situation.
For advice specific to your situation, contact us to schedule an appointment.
About the Koons & Riswold Law Office
Koons & Riswold maintains an office in Davis, CA and Auburn, CA to provide clients with legal services in Auburn, Davis, and the surrounding areas. Our Auburn and Davis lawyers provide legal services, which include: Living Trust and Estate Planning services, Probate, Elder Planning, and Trust and Estate Administration. Our lawyers have deep roots in Northern California, having strong familial, community, and professional ties to the region.