I want to address professional trustee’s fees. These are different than lay trustee fees. A lay trustee is a brother or sister or somebody else in the family that is named trustee.
A professional trustee is generally a large bank, or it’s a large company that holds themselves out as professional trustees.
The question is, what is the reasonable fee that professional trustees should be charging for trust administration services? And the general answer is it’s generally around 1% of the trust assets. Each year that goes by, the trustee will likely be entitled to take 1% of the total trust portfolio.
Trustee Fees When Real Property is in the Trust
Now keep in mind that if there’s a lot of real property in the trust that needs to be managed – lots of rental properties, apartment complexes, and so forth – the fee is going to be more than 1%. But it shouldn’t be a whole lot more than that. It will likely be 1.5% percent or so of the trust assets. I’ve seen it as high as 2%, but that’s a rare case.
So, as a general guide to reasonable professional trustee’s fees, they are usually around 1%, and sometimes as high as 2%.