Technical article
A US$500,000 Trust: Three Ways to Run It and the Yearly Cost of Each
Here are three ways to run a trust of this size, with the yearly cost of each.
Imagine a widow in Ohio with US$500,000 she wants to leave to her two children through a trust. She asks one question: what does it cost each year, and does the way it is run change the number?
It does. Here are three ways to run a trust of this size, with the yearly cost of each. These are sums from published inputs, not quotes. They add a tax return but leave out outside lawyers and real estate.
| How it is run | Yearly cost | The sum behind it |
|---|---|---|
| Family-managed | About 0.24% to 0.74% | Index funds at 0.09% to 0.14% (US$450 to US$700), plus a tax return at US$750 to US$3,000 |
| One bank trustee does everything | About 1.20% plus fund costs | A US$6,000 minimum; the rate alone would give US$3,250, so the minimum rules |
| A trustee plus a hired manager | About 2.1% to 2.7% | A directed trustee minimum of US$5,000 (1.00%), an adviser at 1.00% to 1.25%, and fund costs of 0.09% to 0.40% |
The bank figures come from one bank's 2026 price sheet, tier C. The adviser range is a 2026 estimate from a money-advice website, tier U, and fund costs are 2025 averages from the Investment Company Institute, tier B. The tax return range runs from one bank's US$750 a filing, through one trust company's US$2,750 a filing, to US$3,000 a year for an accountant (one law firm's top figure).
The first row says family-managed. It means a family member acts as trustee and handles the investing, with index funds, and pays for the tax return. The cost is lowest on paper.
The second row is a bank trustee that also runs the investments. The minimum sets the fee, since 0.65% of US$500,000 would be only US$3,250. Fund costs of about 0.1% to 0.4% come on top.
The third row is a directed trust, where an outside adviser runs the money. The trustee's minimum is lower, but the adviser's fee comes on top, and so the total is the highest.
Offshore adds fixed costs. One provider's blog puts an all-in US$5,000 to US$10,000 a year at 2% to 4% of US$250,000, and at 0.5% to 1% of US$1 million. That is a provider's estimate, tier U. At US$500,000, the same range is 1% to 2%. That is an example worked from the blog's range. The Cook Islands law firms suggest about US$1 million in total assets, or US$500,000 in liquid assets, for a typical candidate. Those are lawyers' guidance, not trustee rules.
You might say: "The family-managed row has the lowest number, but who does the work?" That is the right question. The sums count the funds and the tax return and leave out the time of the person who acts as trustee. Rows two and three pay a firm to do it.
You could ask a trustee what the minimum is before asking about the percentage, and ask any adviser whether its fee sits on top of the trustee's. You could also ask your children how they feel about running the trust themselves.
This touches family. In the first row, the work lands on a family member, and in the other two a firm carries it for the fee.
If you manage a trust for a parent or a child, what does it take you each year in hours? Share it here. Someone deciding between the rows may find your number useful.
Figures are estimates for planning, based on public data. Date read: October 2026.
Sources
- BOK Financial Advisor Trust Services fee schedule, January 2026 (C)
- Investormint wealth adviser fee benchmarks, August 2026 (U)
- Investment Company Institute, fund fees 2025 (B)
- Stonehage Fleming fiduciary fee schedule, 2026 (C)
- CitizenX offshore trust cost guide, August 2026 (U)
- Alper Law, Cook Islands set-up (C)
Tell us in the comments