Trustees play a crucial role in managing and distributing trust assets in accordance with the trustor’s wishes. Given the responsibilities involved, many people wonder: Do trustees get paid in California? The short answer is yes, but the amount and method of compensation depend on several factors. Below, we’ll explore trustee compensation, including how fees are determined, what the law allows, and considerations for beneficiaries and trustees.
Are Trustees Entitled to Compensation?
Under California Probate Code Section 15681, a trustee is entitled to “reasonable compensation” for their services unless the trust document specifies otherwise. Compensation ensures that the trustee is fairly compensated for managing trust assets, handling legal and financial matters, and fulfilling their fiduciary duties.
How Is Trustee Compensation Determined?
1. Terms of the Trust Document
Some trust documents specify how much the trustee will be paid.
The document may set a fixed amount, an hourly rate, or a percentage of the trust’s value.
If compensation is explicitly stated, the trustee must follow those terms unless all beneficiaries agree otherwise.
2. Reasonable Compensation Standard
If the trust document does not specify a fee, the trustee is entitled to “reasonable compensation” based on:
The complexity of the trust and the duties involved.
The amount of time and effort required.
The size of the trust estate.
The trustee’s experience and expertise.
Customary fees for similar trusts in California.
3. Court-Determined Fees
If disputes arise over trustee compensation, the matter may go to California Probate Court, where a judge will determine a reasonable fee based on the factors above.
How Much Do Trustees Typically Get Paid?
While there is no fixed rate for trustee compensation in California, common practices include:
Hourly Rates: Some trustees charge hourly, typically ranging from $50 to $150 per hour, depending on experience.
Percentage of Trust Assets: Professional trustees often charge 1% to 2% of the trust’s value per year as a management fee.
Flat Fees: Some trusts specify a flat annual fee for trustee services.
Can a Trustee Waive Their Fee?
Yes. A trustee, particularly a family member, may choose to waive their compensation. However, even if a trustee serves without pay, they are still entitled to reimbursement for expenses incurred while administering the trust, such as legal fees, accounting costs, and travel expenses.
What If Beneficiaries Disagree with Trustee Fees?
Beneficiaries who believe a trustee is overcharging or mismanaging fees can:
1. Review the Trust Terms – Ensure the trustee is following the compensation provisions.
2. Request an Accounting – Beneficiaries can demand an accounting of trust expenses, including trustee payments.
3. Negotiate a Fair Fee – Trustees and beneficiaries can attempt to agree on a reasonable payment structure.
4. Petition the Court – If disputes persist, a beneficiary can file a petition in California Probate Court to challenge unreasonable fees.
Should You Hire a Professional Trustee?
While many family members serve as trustees without payment, hiring a professional trustee (such as a trust company or attorney) can ensure:
Proper asset management and legal compliance.
Impartial administration of the trust.
Reduced family conflicts over money matters.
Professional trustees typically charge higher fees than family members but provide expertise that may benefit the trust and its beneficiaries in the long run.
Final Thoughts
Trustees in California are generally entitled to reasonable compensation for their services, whether stated in the trust document or determined by court standards. While family members often serve for free, professional trustees and complex trusts often justify compensation. If you are a trustee or beneficiary dealing with compensation issues, consulting a California estate attorney can help ensure fair and legal administration of the trust.
Contact the top-rated California trust and probate attorneys Moravec, Varga & Mooney today to schedule a telephonic consultation. Have questions, call (626) 460-1763 or email LV@MoravecsLaw.com.
Southern California Probate Lawyer Serving all counties in California, including Los Angeles, Riverside, San Bernardino, Sacramento, Santa Cruz & Beyond.
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