How much may a trustee charge for their services, and when?
I am the trustee for my brother's account. He is dying of cancer and has ceased treatment. The amount of the account is approximately $200,000 and the cancer is melanoma. At this rate the trust will be left with about $100,000 - $150,000. I have never charged a fee for trustee services. Upon his death before the trust is transferred to his son I would like to charge a fee. May I do this and how much may I charge?
I have provided some helpful information to guid you below:
Trustee compensation is covered in California Probate Code Sections 15680-81.
15680. (a) Subject to subdivision (b), if the trust instrument
provides for the trustee's compensation, the trustee is entitled to
be compensated in accordance with the trust instrument.
(b) Upon proper showing, the court may fix or allow greater or
lesser compensation than could be allowed under the terms of the
trust in any of the following circumstances:
(1) Where the duties of the trustee are substantially different
from those contemplated when the trust was created.
(2) Where the compensation in accordance with the terms of the
trust would be inequitable or unreasonably low or high.
(3) In extraordinary circumstances calling for equitable relief.
(c) An order fixing or allowing greater or lesser compensation
under subdivision (b) applies only prospectively to actions taken in
administration of the trust after the order is made.
15681. If the trust instrument does not specify the trustee's
compensation, the trustee is entitled to reasonable compensation
under the circumstances.
Basically, Section 15680(a) states that the trustee's compensation is
whatever is specified in the trust document. If that compensation is
unreasonably high or low, 15680(b) allows a judge to modify that
If the trust document doesn't specify compensation, then the trustee
is entitled to "reasonable compensation" under Section 15681.
See "Settling the Revocable Trust in California: A Primer for the
Non-Professional Trustee" by Toews Law Office:
"IV COMPENSATION OF THE TRUSTEE
1. Entitlement to Compensation
The trustee of a revocable trust who administers the trust upon the
death of the settlor is ordinarily entitled to a fee for his or her
services. The most common provision seen in trust documents, which
mirrors state law on this subject, states that the trustee is entitled
to pay himself "reasonable compensation" without prior court order.
The term "reasonable compensation" is generally understood to mean
that fee which a professional trustee would charge for performing
those services. Since most professional trustees are banks, this
refers in practice to the fee schedules published by bank trust
departments in the area where the trust is being administered. As of
this writing, the fee charged by professional trustees for small to
medium-sized estates will be the same as, or close to the statutory
probate fee for an estate of similar size. Since probate fees are
based on the gross assets of the estate, fees for large estates may be
negotiated at levels below that of the published schedule."
As indicated in Toews' primer, "reasonable compensation" for
administering a small to medium-sized estates will be typically be
similar to the statutory probate fee for an estate of similar size.
Statutory probate fees are covered in Probate Code Section 10800:
"10800. (a) Subject to the provisions of this part, for ordinary
services the personal representative shall receive compensation based
on the value of the estate accounted for by the personal
representative, as follows:
(1) Four percent on the first one hundred thousand dollars
(2) Three percent on the next one hundred thousand dollars
(3) Two percent on the next eight hundred thousand dollars
(4) One percent on the next nine million dollars ($9,000,000).
(5) One-half of one percent on the next fifteen million dollars
(6) For all amounts above twenty-five million dollars
($25,000,000), a reasonable amount to be determined by the court.
(b) For the purposes of this section, the value of the estate
accounted for by the personal representative is the total amount of
the appraisal value of property in the inventory, plus gains over the
appraisal value on sales, plus receipts, less losses from the
appraisal value on sales, without reference to encumbrances or other
obligations on estate property."
Again, though, please understand that Section 10800 refers to
administration of a probate estate. It provides a useful comparison
for estimating "reasonable compensation" for the administration of a
trust estate, but trustees are NOT bound by Section 10800.
Also see "Trustee Fees: How Much is Enough and How Much is Too Much?"
by Phil Craig:
"15681. If the trust instrument does not specify the trustee's
compensation, the trustee is entitled to reasonable compensation under
So to answer the question, we have to find out what the trust
instrument says.If it is silent, then Section 15681 tells us the
compensation is to be "reasonable compensation under the
What is reasonable under the circumstances? If it were me, I would
gather up the brochures of the various bank trust departments in the
area to determine their rates. Where I live, the fee is .75% to 1.20%,
depending on the size of the trust and the type of assets. The minimum
There is no exact answer as to a fixed amount or fixed percentage
"Reasonable compensation" is the answer under Section 15681 if the
trust doesn't specify fees.