I am updating my estate plan (Last Will and Testament) to add my 4 rental properties. I am putting them in a trust, however the attorney has advised that they will still have to go through probate unless I "fund the trust". I was quoted an up front fee (~$2000) to retitle everything into the trust including eligible investment accounts in addition to my real estate and then a $500/yr maintenance fee (not sure what the purpose of this fee is).
In addition, I think I will have to update all of my leases and get them resigned. With all of these fees coming out of my current income and complexity of retitling, resigning leases, and whatever else I need to do, I am thinking of foregoing this step. My rationale is that my assets will cover all the legal fees and probate fees if I pass away. I am single, so the timing of disbursement of my assets isn't critical to support anyone.
Additionally, I may set up an LLC in the future and will have to go through the re-title again at that point.
Would appreciate any pros/cons and or other considerations from anyone who has gone through this before.
Attorney · Spanish Fork, UT · Member since 2025 · 77 posts · 97 votes
7mo
Hi Allison, you pose a really good question and, as an attorney who has both handled many probates and drafted many living trusts, I nearly always recommend a fully funded living trust to my clients, especially to real estate investors.
First, as far as cost is concerned, probate is virtually always more expensive than simply funding your trust during your lifetime. This is especially true for real estate investors or others who may have property in multiple states because this will often lead to multiple probates—one in each state where you own property.
Second, and often more meaningfully, probate significantly increases the likelihood of conflict and/or litigation in the administration of an estate. While cost is certainly a reasonable consideration when engaged in estate planning, in my experience people are often more concerned with the impact their the planning has on those they leave behind and preventing unnecessary conflict. A thoughtfully prepared and fully funded trust stands out in its ability to leave a positive legacy.
Third, the public nature of probate and requirements therein to notify creditors has a number of peripheral impacts on your estate, including making it easier and thus more likely for creditors to make a successful claims against the estate.
As for the specific firm and their fees, the first thing to be aware of is that you can fund your own trust, you are not required to use the firm who drafted the trust to do that. This typically involves assigning business entities (e.g. LLCs) into the trust, deeding real estate (that you own directly in your own name) into the trust and assigning or using POD (pay on death) or TOD (transfer on death) beneficiary designations for financial accounts including checking and savings accounts, brokerage accounts, retirement accounts, life insurance etc. It doesn't hurt to use the firm to fund the trust as they will likely be well positioned to ensure nothing is missing. The maintenance fee is likely for funding/updating the funding over time as you acquire new assets such as the future LLC.
In the end, it would almost certainly be better to work on funding your trust, whether you choose to use the firm that drafted the trust or attempt to do it on your own.