We get this question routinely. We have Beneficiaries of a Trust come to us and say, “My brother or sister is the Trustee of the Trust and they’re saying they’re going to take $150,000 in Trustee’s fees. Is that allowed?” And the answer is, “Well, it depends.” And, of course, it depends on the facts and circumstances in the case. $150,000 might be appropriate in one case for Trustee’s fees, but probably not appropriate in most cases. Some Trustees have the idea that they can pay themselves 1%, or 1.5%, or even in some cases I’ve seen 2% of the value of the Trust Estate. And that’s just wrong!
In our experience, most Probate Judges are not going to award a lay Trustee, somebody that’s not a professional Trustee, or a professional Fiduciary, more than a reasonable hourly rate. And that reasonable hourly rate depends on what jurisdiction you’re in. It’s going to be somewhere between $30 an hour and $100 an hour. And that’s a rough estimate. Every courts going to be a little bit different.
Keeping Track of What You Have Done as Trustee of the Trust
I will say this, if you’re a lay Trustee – not a professional Trustee – and you expect to be paid for the services you provide to the Trust, you need to keep track of the things you’ve done for the Trust. Keep a log and write entries showing everything you do for the Trust and how much time you spent doing it. That way, if there’s an argument about how much you should be paid an hour, you and the beneficiaries can come up with a negotiated rate. Then you just multiply it by the hours that you’ve worked.
But, at least, you, as a Trustee, will have a log that is made at the same time you’re providing the services to show that you actually did the work. It’s only an issue of how much you should be paid.