Q:

What percentage of an estate or trust can the trustee legally charge?

A:

Quick Answer

Generally, executor or trustee compensation for administering an estate or trust is set at around 1 percent of the total value of the assets, according to FreeAdvice. Absent a compensation agreement established in the will or trust document, the fee schedule for administration is typically set by state law.

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Full Answer

The compensation for executors or trustees of estates or trusts varies depending on the state where the matter is handled; the size of the estate or trust; and the time and expertise required to handle its affairs, notes the American Bar Association. Ideally, the will or trust document establishes a compensation rate for the executor or trustee; however, if it does not, state laws apply. Some states allow executors and trustees to be reasonably compensated, in which case they must negotiate compensation with the beneficiaries of the estate or trust. Other states have established a fee schedule.

One percent of the value of the assets of the estate or trust is the baseline rule of thumb for executor or trustee compensation, as of 2015. Compensation around that baseline is typically considered reasonable by state courts. State fee schedules also target that amount. For example, the Georgia fee schedule pays trustees 1.75 percent per year on the first $500,000 in trust assets and 1.25 percent on the next $500,000. Compensation decreases to 1.0 percent on the next $1 million, then 0.85 percent on the next $3 million. It decreases to 0.50 percent on the portion of the trust over $5 million in value, explains LegalZoom.

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