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Charitable Remainder Trust Fee Comparison - How does Valur stack up versus the competition

Two of the most important questions customers often ask us is "How much does Valur’s services cost?” and, just as importantly, “How does it compare to the competition?” We built Valur based on the goal of making these tax advantaged structures accessible and transparent to everyone which is party of why we think it’s important that our customers understand 1) our fees and 2) how we consistently beat the competition on price and quality. Our goal in this article is to outline what costs you should be aware of, how Valur stacks up versus the competition, and why you should care!

What are the components of setting up and administering Charitable Trusts?

Each layer of tax and estate planning will typically cost you something. So what are the components of tax planning with Charitable Trusts? Let’s outline each of them below:

  • Trust Education and Formation - Setting up a trust has historically required paying a lawyer and fees typically range from $10k-$25k (or more) depending on the lawyer and your needs. Even if you decide not to set up the trust, just the consultations and analysis typically cost you something.
  • Trust Administration and Tax Preparation - You’ll have to find a third party administrator and tax preparer that understands the accounting, tax filing and regulatory requirements of Charitable Remainder Trusts. The fees typically range from 0.5% to 1.1% of assets annually (or 50bps to 110bps).
  • Qualified Appraisal Services - When any non-cash or publicly traded stock gift is made to the trust you’re required to receive a qualified appraisal for those gifts if you want to receive a charitable deduction (which you should!). These typically cost anywhere from $500 - $10,000 depending on the type of asset.

Cost Comparison

Below we’ve included the costs of Valur and some of the most popular trust administration companies to show you how we stack up to them. These providers offer a variety of services but we’ve exclusively outlined the fees for basic trust administration.

 

 ‍

 Company  Minimum Annual   Fee  First $1 million  First $5 million  Above $5 million
 Valur  $1,500  0.25%  0.25%  0.25%
 J.P. Morgan  $15,000  0.55%  0.55%  0.35%
 Charles Schwab  $5,000  0.50%  0.50%  0.25%
 Northern Trust  $20,000  0.40%  0.40%  0.20%
 Wilmington Trust  $8,000  0.60%  0.40%  0.25%

‍

Valur is one of the lowest cost solutions in the market when it comes to trust administration. But those are only the costs for trust administration, what about the other aspects of setting up and managing a charitable remainder trust? Let’s see what that would look like with a real customer example.

Customer Example - Selling a small business

Let’s run through a realistic example of what it would cost a customer to set up and administer their CRT. Assume this individual is selling their business for $8 million.

 Company  Trust Education &   Formation  Qualified   Appraisal   Services  Annual Trust   Administration  Total First Year   Costs
 Valur  $0 (included in our   services)  X  $20,000  $20,000
 J.P. Morgan  $15,000*  X  $38,000  $53,000
 Charles Schwab  $15,000*  X  $32,500  $47,500
 Northern Trust  $15,000*  X  $26,000  $41,000
 Wilmington Trust  $15,000*  X  $29,500  $34,500

 

*Typical attorney cost ranges from $10,000-$25,000. We are not indicating that these firms will provide you with a lawyer or services, only that by using them you’ll likely incur those costs with a lawyer directly.

In this situation, on a trust expected to last 50 years (average for a 30 year old) the higher administration costs from JPMorgan could ultimately cost this customer more than $10 million dollars in lower distributions for them and their family.

As you can see our integrated model enables us to set up, administer and offer these structures to you at a significantly lower cost and over time these saved fees really add up and cost you and your family. Not only do we provide more services at a cheaper price but we make a point to provide these services at a higher quality.

How does Valur handle every other stage of the process?

Our team at Valur makes it a point to provide above and beyond service, especially at a lower cost compared to the competition.

  • Tax Education - We provide complimentary education resources as we believe it shouldn’t cost anything to access the necessary information required to make informed decisions about your trust and its financial impact.
  • Trust Formation - We create your customized trust documents on demand and set up the associated accounts. (There’s no costs at this stage, you can truly set up your trust for free with no obligation.)
  • Tax Preparation - These services are embedded in our platform and are included with no extra cost. We’ll give you the personal forms you need and file the required trust tax filings each year and you’ll never be burdened by the trust’s ongoing required tax filings.
  • Qualified Appraisal Services - We have a variety of value-added partners on hand, that can provide a qualified appraisal for assets of any kind. We manage the process, making it simple and seamless.

So what does all of this mean?

When compared to the competition, Valur offers the highest value at the lowest cost all while managing every step of the process from deciding which trust to setup, creating the trust documents and setting it up and administering your trust. People often ask us how we are able to do this. It comes down to our proprietary technology platform which automates our offerings instead of relying upon expensive lawyers and trust administrators which enables us to further our mission at Valur of making high quality tax and estate planning offerings accessible to everyone.

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About Valur

We built a platform to give everyone access to the tax and wealth building tools of the ultra-rich like Mark Zuckerberg and Phil Knight. We make it simple and seamless for our customers to take advantage of these hard to access tax advantaged structures so you can build your wealth more efficiently at less than half the cost of competitors. From picking the best strategy to taking care of all the setup and ongoing overhead, we make it easy and have helped create more than $500m in wealth for our customers. Schedule a time to chat with our team and learn more about how we can help you!
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