How much does a professional trustee cost?

How expensive is a professional trustee?

It depends mostly on who you hire and how much the trust holds. The most common model is a yearly fee calculated as a percentage of the trust’s assets. For a bank or trust company, published schedules often run about 0.5% to 1.25% a year on the first $1 million, with lower percentages above that. Investment management is sometimes billed on top.

To put that in dollars:

• A $1 million trust at 1% costs about $10,000 a year.
• The same trust at 0.75% costs about $7,500 a year.
• A $300,000 trust at 1% would be $3,000, but if the firm’s annual minimum is $5,000, you pay $5,000. Minimums make small trusts expensive in percentage terms.

Over a trust that runs for 10 or 20 years, say one that holds money for young children, the total adds up. That is why the choice of trustee is a real financial decision, not just a name on a page.

What are typical fees for a trustee?

Fee schedules are not always easy to find, so ask for the current one in writing. These ranges are typical, and they vary by region, firm, and how complex the trust is.

On top of the trustee’s own fee, every kind of trustee can usually pay the trust’s real expenses from the trust: tax preparation, appraisals, legal advice, recording fees, and investment management if the trustee hires it out.

What do professional trustee services include?

A professional trustee does the same job a family successor trustee does, with staff, systems, and experience behind it. Typical trustee services include:

• Collecting, safeguarding, and valuing the trust’s assets
• Investing the money prudently, often through their own investment team
• Paying bills, debts, and taxes, and filing the trust’s tax returns
• Making distributions to beneficiaries under the trust’s terms
• Keeping records and sending regular accountings to beneficiaries
• Deciding discretionary requests, such as a beneficiary asking for tuition money

The value is less in any single task and more in neutrality and continuity. A company does not get sick, move away, or take sides between siblings.

How do professional trustee companies charge?

Read the fee schedule closely. The headline percentage is only part of it. Ask about:

• Tiers. Many charge one rate on the first $1 million and a lower rate above it.
• Minimums. Both an asset minimum to accept the trust at all, and an annual fee minimum.
• Special asset fees. Extra charges for real estate, a business interest, or anything that is not a brokerage account.
• Tax and accounting fees. Some include the trust’s returns; others bill them separately.
• Termination or distribution fees. A charge when the trust closes or assets move out.
• Investment fees. Fund expenses inside the portfolio, on top of the trustee fee.

What fees can a non-professional trustee charge?

Most states let any trustee, family or not, take “reasonable compensation” unless the trust sets a different rule. A few states publish fee schedules (New York’s statutory commissions are one example); most leave it to what is customary for the work and the size of the trust. Non-professional trustee fees are often well below what a company charges, and many family members waive them entirely.

There are good reasons a family trustee might take a fee: they are doing hours of work that other beneficiaries are not, or they are not a beneficiary at all. If they do, records of time spent help if anyone questions it later. You can also set the rule yourself in the trust, with your attorney: a flat fee, an hourly rate, or no fee. For more on the role itself, see what a successor trustee does.

Family member or professional: how to choose

There is no single right answer. It is a trade between cost, skill, and family dynamics.

A professional trustee tends to make more sense when:

• The trust will hold money for years, such as for young children or grandchildren
• A beneficiary has special needs, an addiction, or creditor problems
• Siblings do not get along, or a blended family has competing interests
• No one in the family has the time, distance, or skills to do it well
• The trust holds complex assets, like rental properties or a business

A family trustee tends to work well when the trust is straightforward, the beneficiaries are adults who get along, and the job ends once the assets are distributed.

Is a professional trustee worth the cost?

Sometimes, and the math is not only about the fee. A family trustee who makes one costly mistake, such as missing a tax filing, selling a house too cheaply, or letting a dispute between siblings reach court, can cost the trust more than years of professional fees. Litigation between beneficiaries is often the most expensive outcome of all.

On the other hand, for a simple trust that pays out to adult children within a year, a percentage fee with a high minimum can be hard to justify. Many of those families do well with a capable relative and paid help for the specialist parts: an accountant for the tax returns, an attorney for the notices, and an appraiser for the house. That mix often costs a fraction of a full-service trustee while keeping the expertise where it matters. It is also the gap the Veros Essential plan is built for: the relative you name stays the trustee, and gets professional trustee assistance through the platform instead of starting from a blank page.

Questions to ask before naming a professional trustee

• What is the full fee schedule, including minimums and special asset fees?
• Will you accept a trust of this size, and what if it shrinks below your minimum?
• Who will actually handle the trust day to day, and how often will beneficiaries hear from you? (In California, you can check a professional fiduciary’s license.)
• Do you require that the trust’s money be invested in your own funds?
• How do you handle real estate, a family business, or personal property?
• Can the beneficiaries or a trust protector replace you, and what does leaving cost?

Ask these before the trust is signed, while you still have leverage, and work with your attorney to write the answers into the trust or a fee agreement where you can.

Can you combine family and professional?

Yes, and many families do. Two common setups:

• Co-trustees. A family member and a professional serve together. The family member brings personal knowledge; the professional handles investing, taxes, and records.
• A trust protector. A family member serves as trustee, and an independent person has the power to replace the trustee or fix problems if things go wrong.

You can also name a family member first and a professional as the backup. To see how trustee fees fit into the full cost of a plan, read our living trust cost guide, and for the basics, what a revocable living trust is.

How Veros helps

With Veros, you set up an attorney-reviewed revocable living trust online and choose your own trustee. On the Basic plan, $799 one time, you appoint your own trustee and administer the trust yourself. The Essential plan, $799 one time plus $10 a month, adds professional trustee assistance, so the family member you name has expert help instead of a blank page, for a small fraction of a corporate trustee’s yearly fee. Premium, coming soon, includes a professional trustee for families who want a professional in the role.