Why is a trust worth $5,000?

Our estate planning at Jan Copley and Russakow Ryan Johnson tends to cost a bit more than other firms in the area, so we're sometimes asked why it costs what it does. An illustration may help.

Think of your valuables, scattered around your house. Your jewelry is in your jewelry box, your watch on the dresser, your cash in the nightstand drawer, your stock certificates in a file somewhere in your desk, and the deeds to those rental properties you have are in that pile in the closet, you think....

Now imagine there was a document that represented your hopes and dreams for your children, your grandchildren, your favorite causes. That's lying around somewhere too.

How can you protect all of that? What do you need?

You need a safe.

And what strategy will you use in buying that safe? "I want the simplest safe I can find. I think I'll go to the toy store and buy one of those child's safes?" No, even though they may be labeled "Fort Knox."

How about, "I think I'll buy the cheapest, flimsiest safe I can find--something someone can break into easily, something that will burn nicely in a fire; something that anyone could carry out the front door!"

To protect everything you have accumulated over a lifetime of hard work? You want something strong, secure.

That's why a well-made trust is a bargain at $5,000. It protects everything you have--now and into the next generation.

One more comparison--the average price of a new car in the United States is $24,764. A very conservative estimate of the cost to insure that car would be $85 a month, or slightly over a thousand dollars a year. That's four percent of the value of the car, but you pay it every year!

Let's say you have a net worth of $1,000,000--not very large if you own a home in California. A $5,000 trust represents one-half of one percent! And that's paid once, not every year like the four percent you're paying for your car insurance. So why would you pay that kind of money to insure your car, but not to protect everything you own and value?

Probably because you have to have that car insurance, but you don't have to have a trust, right?

And that's true, you don't have to. But being a grown-up means you don't do things just because you have to. You do them because they are prudent, wise and smart.

That's what makes a trust worth $5,000.

Note: the author, Chris Johnson, also keeps a large and difficult-to-move safe for his items, in addition to his trust.