Do I Need To Pay My Trustee?

The issue of trustee compensation is sometimes a confusing one. Not every trustee expects to be paid. Conversely some trustees expect compensation. A recent article discusses the “when and how” of trustee compensation.

Trustee compensation is determined in the trust documents. When setting up the trust, the trust creator can specify whether there will be no compensation, reasonable compensation, a set amount of compensation, or compensation calculated via a formula provided. Importantly, any potential trustee should be made aware of the specifics of any compensation before being named in the trust.

Most trusts allow reasonable compensation. Additionally, most states allow reasonable compensation if the trust is silent as to compensation. What is reasonable is often determined by considering the situation at hand. Important considerations include: (1) the trustee’s qualifications and experience, (2) the time spent by the trustee in discharging his or her duties, (3) the value of the trust, and (4) the complexity of the trust administration. The trustee may also waive compensation if he or she so chooses.

If you are a trustee who must request reasonable compensation, be sure to keep a log detailing every action you have taken in furtherance of your trustee duties. Include the amount of time spent on everything, as well as all mileage and out-of-pocket expenses. After the trust has been administered, provide the log as well as an accounting to the beneficiaries. If the beneficiaries dispute it, the trustee should submit it to the court.

For expert assistance with all aspects of your trust, contact us at (626) 696-3145.

Request A Consultation

"*" indicates required fields

This field is for validation purposes and should be left unchanged.