Protecting your assets means, in many cases, setting up an asset protection trust either domestically or in an offshore jurisdiction. But before you get started, it’s important to understand the average asset protection trust cost and what that entails.
This might sound like a simple answer – after all, don’t you just call an attorney and ask how much they charge to set up an APT? Not really. In fact, asset protection trust costs can vary heavily, and grasping why that’s the case will help you set up the perfect APT for your needs.
Overall Costs for Asset Protection Trust Setup
No matter who you turn to, you can expect it to cost anywhere from a few thousand dollars to $100,000 or more to set up an asset protection trust. Setting up a trust is relatively inexpensive for any individual or business.
Let’s take a closer look.
Domestic Asset Protection Trust Costs
Domestic asset protection trusts are usually cheaper than foreign or offshore counterparts. That’s because the attorneys in charge of setting up your asset protection trust have fewer fees and less work to accomplish.
Remember, you must have an attorney set up your asset protection trust – it can’t be your future trustee, you, or a financial advisor, so this is one legal fee you can’t avoid (nor should you want to with something as important as asset protection).
Most domestic asset protection trusts cost anywhere between $3000 and $7000. This includes only the one-time fees you’ll pay to set up a trust, not ongoing fees.
Offshore Asset Protection Trust Costs
Offshore asset protection trusts cost more than domestic ones, oftentimes over $10,000 or even up to $100,000. The exact amount you’ll pay is contingent on:
- The attorneys you work with
- The jurisdiction in which you set up your offshore asset protection trust
- How much work goes into the asset protection trust (e.g., how protected is the APT against other jurisdictions, etc.)
In exchange, your asset protection trust will (in general) be more secure than a domestic asset protection trust. This makes it an effective, popular investment and security vehicle for high net worth individuals looking to secure real estate, liquidity, and more.
Setup Fees and Maintenance Fees
Above, we discussed setup and ongoing fees. When you set up an asset protection trust, you pay for the initial paperwork creation and documentation, plus associated legal fees.
But you also normally need to pay administration and management fees. These are billed on a yearly basis in most situations, and they could cost $5,000-$25,000 per year or more. In addition, many maintenance fees for asset protection trusts charge you 1% of your asset value.
So, the more wealth you store in an asset protection trust, the more you may need to pay to keep those assets secure and managed properly. These ongoing fees pay for the services of your appointed trustee: a highly important role that becomes even more important when you look into trust development and management for high net worth individuals like yourself.
… But Is That Really How You Should Think of APTs?
So, asset protection cost is anywhere between a few thousand dollars and $100,000 depending on how much you want to save, where the asset protection trust is set up, and who you appoint to be your trustee. That's it, right?
Not exactly. In fact, it’s a better idea not to think of asset protection trust costs in this way at all.
As a high net worth individual with millions of dollars at stake, few things are as important as keeping your wealth secure against aggressive litigators, disgruntled customers or business partners, and any other motivated party that might come after your money, real estate, and other holdings. Your asset protection trust is vital for the future financial security of yourself and any beneficiaries, like your children.
Money should really be no object. And you should think of the cost of an asset protection trust not in terms of the raw dollar amount but in terms of how much you have to pay to keep your assets safe and to make money from proper trust management.
Indeed, when managed by an expert, the assets in your asset protection trust could very well earn you money over time. In the long run, that might even drop the costs of APT setup and ongoing maintenance.
The True Cost of Asset Protection
Earlier, we noted that setting up a trust is relatively inexpensive. But what if you don't just need to set up a trust? You don't need something that just gets the job done. You need something that works 100% of the time when it matters and that you can rely upon for years to come.
So how much does it cost to set up a trust that does what you need? That’s a much more complicated and important question.
If you are a high net worth individual looking to set up an asset protection trust that:
- Ensures you make money by setting up the trust
- Protects you if and when you get sued, so you don't get taken down
… You can’t just pay a few thousand dollars and call it a day. At Dominion, we think of asset protection trust as protecting and guaranteeing value. For us, setting up an APT is also:
- Proper asset protection architecture planning and setup
- Tax planning and preparation
- Investment setup and understanding to ensure that clients make money after fees
You can’t escape fees when setting up good asset protection trusts. But you don’t want to – you want to pay for something that works every time and that defends you when you need it the most.
Think of it this way:
- You can purchase a normal car for an affordable price
- Or you can purchase a luxury car for five times the amount of money
On paper, both of these cards do the exact same things. They have four wheels, they have seats, and even have air-conditioning and stereo systems. Their primary purpose is the same: to get you from place to place.
But there's an enormous difference in terms of what you can expect between the two vehicles. You can't expect your normal car to run smoothly 100% of the time, nor can you expect it to provide you with a wealth of dazzling features, ranging from heated seats to voice-activated assistance to automatic roadside alerts and more.
When you buy a luxury car, you can – and should! – expect that. You don’t spend more money on it for no reason. You pay for quality. The same is true when it comes to asset protection trusts.
So, How Much Does It Cost to Set Up an Airtight APT?
High net worth individuals like yourself have a vested interest in keeping their assets secure against all possible threats. With that in mind, you can’t settle for an “okay” APT setup and legal team. You want a quality team – and every high net worth individual or business owner knows the oceanic difference between an “okay” team and a “rockstar” team.
To set up an airtight, trustworthy asset protection trust, expect to spend tens of thousands of dollars. But that will be money well spent.
Not only will you ensure that your assets are secure against possible threats, you’ll also set up your trust so you can install a trustee who manages your assets properly and profitably. When run smoothly, that APT will continue to generate wealth for you for as long as you have assets stored in the trust. Over time, you'll make as much money as you need to cover the costs of this initial investment.
Is the Cost Worth It?
That's something only you can answer for yourself! But at Dominion, we firmly believe that the cost of quality asset protection trust setup is extremely valuable, and well worth it in the long run.
Allow us to explore one more hypothetical scenario:
- You set up a barebones asset protection trust in the US for a few thousand dollars. Even though you save money in the short term, when someone sues you later on, they are able to take all the valuable assets in the trust with a minimum of effort
- You set up a comprehensive, defensively robust asset protection trust in an offshore jurisdiction with the assistance of knowledgeable legal experts. It costs significantly more, but when someone comes after you, your assets are untouchable and continue to generate income for you throughout legal proceedings
Put yourself in the shoes of both people in the scenario. Which would you rather be?
If it’s the second person, you should contact Dominion right away. Our knowledgeable experts can help you get started with trust setup, plus connect you to the right lawyers to ensure your paperwork is created in the right way.