If you’ve been researching asset protection trusts (APTs), you’ve likely heard that they’re the most effective tool for keeping your wealth safe. You may also have heard people arguing over whether or not the security a trust provides is worth the cost of establishing one.
To help you decide if an APT is worth the price, we’ll explain how much an asset protection trust costs and the benefits it provides:
- General Asset Protection Trust Cost Range
- Factors That Influence Asset Protection Trust Costs
- Ongoing Asset Protection Trust Costs
- Is an Asset Protection Trust Worth It?
General Asset Protection Trust Cost Range
Here’s a quick ballpark range of how much an asset protection trust costs. Keep in mind that these estimates are generalizations for setup only. Several factors can influence the overall cost of an APT:
- Domestic asset protection trust (DAPT): A DAPT costs roughly $8,000–$10,000 to set up. This price range is specifically for simple domestic asset protection trusts and not more complex versions that need added features.
When more complex structures or higher-valued assets are involved, domestic asset protection trust costs can start closer to $15,000. For example, if you intend to use a DAPT to protect several high-value real estate pieces, you will likely spend more than average.
- Offshore asset protection trust (OAPT): An offshore asset protection trust often costs $20,000–$30,000 or more upfront. These trusts have higher initial fees because of the need to establish offshore accounts, hire overseas trustees, and file documents outside of U.S. jurisdiction. The overall cost is also influenced by the complexity of the trust structure and the value of the assets it aims to protect.
- Annual maintenance: You will commonly spend $2,000–$5,000 per year for domestic structures and $6,000–$9,000 or more per year for offshore trust/LLC structures.
Keep in mind that you should never make your decision based solely on setup costs. Make sure to inquire about ongoing maintenance fees, and ensure that the person establishing your trust is experienced. Also keep in mind, these prices are as of the writing of this article. Prices may change and time progresses.
Factors That Influence Asset Protection Trust Costs
Several moving parts combine to create your total asset protection trust cost, which is why quotes vary so widely. Some of the major factors that impact costs include:
- Jurisdiction choice
- Domestic (U.S.) trusts are usually cheaper to draft, administer, and maintain.
- Offshore options like the Cook Islands or Nevis come with higher legal fees, foreign trustee charges, and banking/filing requirements.
- Plan complexity
- A straightforward DAPT for one person that contains a few brokerage accounts is much easier to set up than an APT that houses multiple LLCs, rental properties, or a business.
- Planner experience and fee model
- Some asset protection planners and attorneys use flatfee packages (for example, $8,000–$12,000 for a domestic plan or $20,000–$30,000 for an offshore plan), which can help set a cost ceiling if you don’t need a highly customized APT.
- Other attorneys and planners bill hourly, often in the $250–$600+ range, which can increase asset protection trust costs if you need to set up several entities.
- Asset value and type
- High-networth clients, or those with significant real estate, private practices, or risk-prone businesses, often need more sophisticated planning, which can increase setup and maintenance costs.
Ultimately, the more you own, the more likely it is that you’ll need a complex offshore asset protection trust to safeguard your wealth. These tools can be more expensive than simpler domestic options, but the security they offer is second to none.
Ongoing Asset Protection Trust Costs
Asset protection trust costs continue after the trust is established. Every APT has ongoing maintenance costs that need to be paid regularly, such as:
- Trustee fees: These often cost $2,000–$10,000 per year, depending on whether your trustee is domestic or offshore, how complex your trust structure is, and what type of assets you are protecting.
- Assetbased charges: Some corporate trustees charge around 0.5%–1.5% of assets instead of, or in addition to, flat fees.
- Compliance and reporting: You need to file tax and legal documents every year. Expect additional costs for IRS/FinCEN filings and foreign banking compliance if you use an offshore trust.
Here’s an example of how these ongoing fees work in a real-world scenario. Imagine you set up an offshore asset protection trust in the Cook Islands that cost $40,000 to establish. The trust you’ve created is fairly complex and uses an LLC to help protect some real estate assets. It would be fair to expect to pay around $9,000 each year to maintain this trust. However, if you were to set up a domestic asset protection trust that only costs $5,000 to establish, the annual maintenance fees may total closer to $2,000.
Is an Asset Protection Trust Worth It?
Whether the asset protection trust cost is “worth it” depends on your risk and your net worth. In general:
- Asset protection trusts make sense when:
- You have substantial assets totaling several hundred thousand dollars or more.
- You’re in a highliability profession (doctors, business owners, realestate investors, etc.).
- You want strong protections that can keep your money safe from lawsuits, even if you lose a claim.
- An APT may not be ideal when:
- The total value of your at-risk assets is relatively modest when compared with the cost of establishing and maintaining an asset protection trust.
In short, if the total value of the assets you’re protecting vastly exceeds the cost of establishing an APT, it’s worth investing in one.
Set Up Your APT With Help From Asset Protection Planners
Now that you know how much an asset protection trust costs, you should have a better idea of whether the expense makes sense for your needs. In our experience, if you have a lot of assets to lose, the peace of mind that an APT provides is well worth the price you pay.
If you decide that an APT is right for you, the team at Asset Protection Planners is here to help you set one up. We’ve spent decades establishing ironclad asset protection trusts for a reasonable cost and look forward to doing the same for you!
Contact us today for a free consultation!
