Estate Law Questions? Ask an Estate Lawyer.
There really is no "maximum" unless it is specified in the trust document itself. Trust documents will usually have one of three options with regard to Trustee fees. ("executor" is someone named in a will to handle a probate, a trustee is named in a trust to manage a trust but they do similar jobs but the executor has court supervision and a Trustee usually does not.) The Trust can be silent on the issue in which case the Trustee is entitled to "reasonable fees" The trust can say "reasonable fees" in which case obviously the trustee gets "reasonable fees". Or the trust can specific and amount which is usually a percentage of the assets under management. For example there is a million dollars worth of assets in the trust the trustee would get one thousand dollars a year. So what is reasonable? Reasonable fees can be what ever the general fees others charge for the same kind of work. A trustee who is also a lawyer however cannot charge their regular hourly fee if it would be unreasonable to pay a professional trustee that rate. For example a good estate planning attorney usually charges about $400/hr. If such an attorney was named as a trustee of a trust he could not charge his normal $400/hr rate when he is just paying bills and keeping track of trust assets and beneficiaries. If he is doing "legal" work that requires his expertise as a lawyer he may be able to charge for those legal fees. That said a lawyer should probably not do this as it is probably a conflict of interest. However, if the trust specifically authorized this and waived the conflict it may be ok depending on all of the circumstances.
Because Lawyers, CPAs, etc., usually have hourly rates that are higher than what a bank would charge to act as a trustee usually lawyers and CPAs will refuse to be trustees because they can not charge their normal billing rates.
Marty Burbank, JD, LLM
I have a Juris Doctorate from Thomas Jefferson School of Law and a Masters of Law from Chapman University School of Law. I am licensed in California.
The accountant and the lawyer can charge separate fees for legal work and for accounting work such as as the lawyer drafting legal documents or the accountant preparing estate tax returns. They should not be charging their hourly rate for such things as giving notice, inventory of assets, managing assets, or paying creditors or beneficiaries. By the way 2-3% is fairly high. It is my experience that most trustees charge between 1 and 2%.
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