So I'm a Trustee: How Much Should I be Paid?
Typically, a trust won’t specify how much a trustee should be paid for their effort. And yet, unless waived by the settlor, or specifically established by settlor, successor trustees have a right to ‘reasonable compensation’. What is reasonable compensation? The answer will depend on the location where the trust is administered.
Here are the factors that should be weighed by the trustee in establishing his or her compensation:
- Amount of time spent - Gross income of the trust - Appreciation in value of trust property - Unusual or special skills – attorney, accountant - Degree of fidelity or disloyalty to trust - Amount of risk/responsibility - Fees charged by other trustees in the local community for similar services - Character of trustee’s work: did it involve skill/judgment, or was it mostly ministerial - His own estimate of the value of his services
A good place to start in establishing how much you will claim as trustee is to poll local professional fiduciaries to establish the ‘local community’ factor.
But bear in mind, the Court can review the compensation, on request of a beneficiary. The last thing you want to do is provoke a dispute with the beneficiaries.