When it comes time to administer a trust, you will encounter a few expenses. Between legal fees, paying taxes, and appraising assets, the costs can rise. So, what are the expenses for trust administration in Wisconsin? We will look at the common expenses so you can make a plan for your trust.
Legal Fees
When you have a trust, you will need to have the help of an attorney. They will assist with:
- Assisting trustees in interpreting the trust’s terms
- Ensuring compliance with Wisconsin law
- Preparing legal documents
- Representing the trust if legal disputes arise
Many times, these fees are based on an hourly rate. With that, you can expect to pay $200 to $500 per hour. Some lawyers will offer a flat fee for preparing documents or providing consultation. However, many will charge an ongoing fee. Often, this happens when the trust has multiple beneficiaries or complicated terms.
Accounting Fees
However, attorney fees are not the only costs associated with trust administration. You may need the help of an accountant. They can assist with:
- Maintaining accurate financial records
- Handling tax-related obligations
- Preparing income and estate tax documentation
Like an attorney, these services are billed on an hourly basis. The fees often average between $100 and $400 per hour.
Trustee Fees
In Wisconsin, trustees can be either individuals or professionals. A family member acting as a trustee may choose not to charge for their services, but professional trustees usually charge a fee. These costs can be based on an hourly rate or a percentage of the trust’s assets.
If a professional trustee administers the trust, their fees can be between 1% and 1.5% of its total assets per year. For example, a trust valued at $500,000 could incur annual trustee fees between $5,000 and $7,500.
Along with that, they may charge for other expenses, including travel costs, postage, office supplies, or other administrative expenses related to managing the trust.
Appraisal and Valuation Fees
Trusts that contain real estate, valuable personal property, or business interests may require formal appraisals to determine their fair market value. If you need a real estate appraisal, that can range from $300 to $600 per property item like artwork, jewelry, or collections.
Tax Obligations
Let’s not forget about other costs related to taxes and administrative expenses. Wisconsin does not have its own estate tax. However, federal estate taxes may apply if the value of the trust exceeds the federal exemption threshold. Additionally, any income the trust generates, such as dividends, rental income, or interest, is subject to federal and state income tax. The trust may be required to make quarterly payments on those holdings.
Court Fees
While trusts are intended to avoid probate, court involvement may still be needed. This can happen if there are disputes or other legal matters. Wisconsin probate court fees for filing motions or other legal actions related to a trust can add unexpected costs. Any legal disputes often involve additional attorney fees, court fees, and expert witness expenses.
Miscellaneous Administrative Costs
In some cases, the trustees might have purchased liability insurance or bonding for protection against potential claims by beneficiaries. Bonding costs vary. However, they range from 0.5% to 1% of the trust’s value.
Some trusts may require additional expertise, such as financial advisors for investment management or real estate agents for property transactions. As you can imagine, if you use these services, there will be associated fees.
Find Out More About the Costs of Trust Administration
What are the expenses for trust administration in Wisconsin? These fees can vary depending on the type of trust and services that you may need. You will want to be aware of these potential expenses so that you can avoid unexpected financial burdens on the trust.
At Collins Law Firm, we offer comprehensive estate planning, administration, business, and elder law services. We proudly serve Southeastern Wisconsin and the Milwaukee area. Schedule your free and confidential consultation today by contacting us or calling (414) 207-6292.