Once reserved for the uber-rich, trust funds are becoming a fad for the masses.
Traditional trust companies can have high minimum deposits for starting a trust and charge thousands of dollars in annual fees. But companies, such as TrustEgg and Kiss Trust, are allowing customers to set up trusts online for a low minimum, and are charging fewer fees to maintain them.
Kiss Trust customers pay $199 to set up their first trust, and $99 for each subsequent trust. The company charges only the cost of the underlying mutual funds for its basic account, a 0.50% annual fee for its deluxe account and a 0.65% annual fee for its premier account. The deluxe and premier accounts come with more investment options than the basic trust.
TrustEgg makes trusts even simpler. The company doesn’t charge a set-up fee, but an annual 0.89% fee on assets in the trust, which are invested in a Vanguard mutual fund.
“This is kind of the Wal-Mart trust,” Ned Armand, President of Eastern Point Trust Company, which administers Kiss Trust, told CNBC. ”We’re bringing a tool to middle class America to allow them to better manage their finances.”