When someone passes away with a trust, their assets and property must be distributed according to the terms of the trust. The person who is responsible for overseeing this process is called a trustee when there is a trust. While serving as a trustee is an important and often emotionally taxing responsibility, it is also a paid position. In this blog post, we’ll explore the topic of trustee fees, including how much they can be and who is entitled to receive them.
The trustee fees are the compensation paid to the person who is responsible for administering a trust. The fees are meant to compensate the trustee for their time and effort in managing the trust’s affairs, which can include:
- Gathering information about the deceased person’s assets and liabilities
- Paying off any outstanding debts or bills
- Distributing assets to beneficiaries
- Filing tax returns on behalf of the trust
- Handling any legal issues related to the trust
For a trustee of a trust, the amount of trustee fees must be reasonable and what can be charged varies depending on different factors such as the amount of time spent on trust administration, the complexity or difficulty of the tasks performed, and the experience or expertise of the trustee.
In most cases, the fee is based on a percentage of the value of the trust. This percentage can range from 0.5% to 2% of the total value of all assets of the trust, depending on the size and complexity of the trust. For example, if the value of the assets in the trust are worth $500,000 and the trustee fee is 2%, the trust trustee would receive $10,000 as compensation for their services. However, under all circumstances no matter how much the trustee receives as a fee, it must be a reasonable amount.
In addition to the percentage-based fee, trustees may also charge a reasonable hourly rate for their services, if there are more complex or difficult tasks undertaken. This rate can vary depending on the work performed and the trustee’s experience and qualifications.
Trustees are rightfully entitled to compensation for the services they provide when managing a trust. In some instances, however, additional fees may be paid out to professionals such as attorneys or accountants if brought on board by the trustee in charge of administering proceedings.
