General Standard for Trustee’s Commission
A trustee is entitled to reasonable commission unless forfeited by failure to file accounts as required by law. The document creating the trust, or a separate agreement between the testator and trustee, may specify the amount of compensation or a formula for the calculation of that compensation. That document will control the payment to the trustee if the language is present in the trust or agreement.
Absent specific language in the trust, the Guidelines for Fiduciary Compensation apply. An attorney or CPA serving as trustee is not entitled to charge at hourly rates if the total of those rates exceeds the Guidelines for Fiduciary Compensation. Attorneys and CPA’s are bound by the fiduciary compensation guidelines just as a lay fiduciary unless approved otherwise in writing by the Commissioner.
Schedule of Compensation
In the absence of written provision in the trust for the trustee’s fees or agreement, the Standing Committee for Commissioners of Accounts has Guidelines for Fiduciary Compensation which include compensation to trustees. Reference is made to that schedule for specific discussion of the fees to which a trustee would be entitled (Fiduciary Compensation Schedule).
Please note that the guidelines are used to establish a presumptive “reasonable” fee and an analysis of the work of the trustee may be necessary to determine what actual fee will be approved by the Commissioner of Accounts. If the trustee encounters extraordinary work involved in the administration of the trust, time records should be kept documenting the date, time and nature of the additional work by the trustee. This additional work can then be documented to the Commissioner of Accounts for his consideration in the determination of a reasonable fee. In the absence of any evidence to the contrary, the guidelines generally are used by the Commissioner of Accounts for the approval of a trustee’s commission.
****NOTE: If you employ an attorney or cpa to perform your duties as trustee, the professional fees you pay will be deducted from allowable commissions payable to you under the guidelines. You may hire an attorney or cpa for the preparation of tax returns or an attorney to assist with legal problems encountered during the administration of the trust and those fees, if reasonable, will ordinarily not be charged against your commission.