Trustee fees in Pennsylvania can vary depending on many factors. Serving as a Trustee is a time-consuming job. Depending on the type of trust (including special needs trusts (or a minor’s trust) the role can become a full-time commitment. In fact, there are companies whose sole existence is to serve as trustees. Decisions must be made about all sorts of issues, including distributions to beneficiaries, selling or buying property, fees to charge, and advisors to hire.
Trustees in Pennsylvania often ask us what form of compensation they will receive for serving. Similarly, the individual who establishes a trust and the trust’s beneficiaries also prefer to know exactly how much of the trust’s resources will be used for administration.
In the trust dynamic, the principal sets the terms. If the trust document has not yet been drafted, the grantor can expressly state the compensation a trustee will receive. If the trustee does not feel the compensation is worth their time and effort, it is their right to refuse to serve. The types of compensation specified can be an hourly rate, a flat rate per year, a combination of both. Some trust documents may even stipulate that trustees serve with no fee. Most often, a trust will include a term specifying that a trustee shall receive ‘reasonable compensation.’
Trust Attorneys and Trustees often favor this term because it provides maximum flexibility. For instance, it allows a regular trustee to be compensated more for extraordinary work. This term will not scare a corporate trustee away from serving when all previously appointed trustees have stopped serving.
“Reasonable” is also the default compensation a court will apply when no compensation has been specified in the trust document. The sources of clarity on what is or is not reasonable are judge’s opinions. Making the question more difficult is that judge’s opinions differ based on county and circumstance.
If you have questions about trustee fees in Pennsylvania or any other estate planning concerns contact our office for a free consultation.