A trustee generally charges somewhere between 0.5% and 2% of trust assets per year to manage an ongoing trust, but how much a trustee can charge in any specific case depends on three things: what the trust document says, whether the trustee is a bank or an individual, and how complicated the assets and beneficiary situation turn out to be. Some trusts spell out an exact fee formula. Others leave the amount to state law or to a court’s judgment about what is reasonable.
What the Trust Document Says Controls First
The single biggest factor is the trust instrument itself. If it specifies a fee schedule, a flat annual amount, or a percentage, that language governs and the trustee is entitled to be paid accordingly. Most states have adopted some version of the Uniform Trust Code, which makes this explicit.
Trust document provisions are not absolute, though. A court can adjust the stated compensation in two situations: when the trustee’s actual duties turn out to be substantially different from what the trust creator anticipated, or when the specified amount is unreasonably high or low for the work involved. A trust drafted decades ago that pays a flat $500 a year for what is now a multimillion-dollar portfolio is a candidate for court adjustment. So is a trust that locks in a generous percentage for what turned out to be a simple checking account.
When the Trust Is Silent
If the trust document says nothing about compensation, state law fills the gap in one of two ways.
Statutory Fee Schedules
Several states publish statutory commission schedules that apply a declining percentage to the value of trust assets. A trustee earns a higher rate on the first tier and a progressively lower rate as the total climbs. A common structure might allow 5% on the first $100,000, stepping down through 4%, 3%, and 2.5% brackets before reaching 2% on amounts above $5 million.
These schedules often calculate commissions separately for principal and for income. A trustee collecting and distributing trust income each year earns a commission on those flows, and a separate commission applies when principal is received or paid out. For a trust holding roughly $2 million in assets, annual statutory commissions under these tiered systems commonly fall between $15,000 and $25,000, depending on the state’s brackets and how much income the trust generates.
The Reasonable Compensation Standard
The more modern approach, used by the majority of states following the Uniform Trust Code, replaces fixed schedules with a “reasonable compensation” standard. When the trust document is silent, the trustee is entitled to compensation that is reasonable under the circumstances.
In practice, reasonableness is measured by looking at the time the trustee actually spent, the skill required, the results achieved, the local market rate for comparable services, and the value and complexity of the trust assets. A trustee who spent 200 hours navigating a messy real estate partition can justify a much larger fee than one who spent 10 hours reinvesting a brokerage account, even if both trusts hold the same dollar amount.
What Corporate Trustees Charge
Banks and trust companies publish fee schedules that typically charge between 0.5% and 2% of assets under management per year, with the percentage falling as the trust grows. A $1 million trust might pay 1% annually, or about $10,000. A $10 million trust might pay closer to 0.5%, or roughly $50,000.
Most corporate trustees also impose minimum annual fees, commonly in the $3,000 to $10,000 range. That means small trusts pay a disproportionately large share of their value in fees. Corporate trustees often add separate charges on top of the base asset fee for services like real estate management, tax return preparation, account termination, and litigation support. Some charge a one-time acceptance fee when they take over a trust. In return, the trust gets an institution that will not die, become incapacitated, or move out of state, and that carries professional liability insurance.
What Individual Trustees Charge
Individual trustees, including professional fiduciaries, attorneys, and CPAs, typically bill by the hour rather than as a percentage of assets. Professional fiduciaries with licensing or certification commonly charge between $150 and $300 per hour. Rates vary by credentials and local market. Someone without specialized training who takes on the role for a family member might charge far less, and many family-member trustees serve for free or for a modest flat annual fee.
Hourly billing works well for trusts that need intensive attention in bursts. Settling a decedent’s estate, selling real property, or resolving a tax dispute might generate heavy billing for a few months and then quiet down. A percentage-based fee charges the same amount during busy and idle periods. The downside is unpredictability for beneficiaries, who may not know until the invoice arrives how much time the trustee spent.
What Drives the Fee Up or Down
Not all trusts demand the same level of attention, and the actual charge should reflect the difficulty of the work. Several factors consistently move trustee compensation:
- Asset complexity. A trust holding publicly traded stocks and bonds is straightforward. A trust holding a family business, commercial real estate, mineral rights, or closely held partnership interests takes far more expertise and hands-on work.
- Beneficiary conflict. When beneficiaries disagree about distributions or investment strategy, the trustee spends much more time on documentation, communication, and legal consultations. Litigious trusts are among the most expensive to administer.
- Trustee expertise. A trustee with tax, legal, or investment credentials can handle work internally that a less experienced trustee would need to outsource. That justifies a higher hourly rate but may reduce total costs by cutting third-party professional fees.
- Size relative to complexity. A $200,000 trust holding a rental property can be harder to manage than a $5 million trust invested entirely in index funds. Percentage-based fees do not always track workload.
- Number of beneficiaries. More beneficiaries generally means more communication, more distribution calculations, and more opportunity for disputes.
Expenses Are Separate From the Fee
Trustees are entitled to reimbursement for expenses properly incurred in administering the trust, and this is on top of their compensation. Reimbursable costs include property taxes, insurance premiums, legal fees, accounting fees, appraisal costs, and travel related to trust business. If a trustee must fly across the country to attend a closing on trust-owned real estate, the trust pays for the airfare and hotel, not the trustee personally.
General overhead is not reimbursable. A professional trustee cannot charge a trust for office rent, utilities, phone service, or furniture. Those are the costs of running a practice. The reimbursable expense has to be directly attributable to the trust, and trustees should keep receipts with a brief note explaining how each cost benefited the trust.
Who Actually Pays: Income or Principal
Trustee fees have to come out of the trust somewhere, and in trusts that distinguish between income beneficiaries and remainder beneficiaries, the allocation matters. Under the Uniform Principal and Income Act, adopted in some form by most states, trustee fees are generally split 50% to income and 50% to principal. The current income beneficiary and the future remainder beneficiary each bear half the administrative cost.
The trust document can override this default. Some trusts direct that all fees come from income, which protects principal for future beneficiaries but reduces current distributions. Others charge everything to principal, which preserves income flow but erodes the base.
Co-Trustees Share, They Don’t Double
When two or more people serve together, the total compensation is generally not doubled. Courts and statutory schemes expect co-trustees to share a single reasonable fee rather than each collecting a full trustee’s fee. How they divide it is typically up to them, and it often reflects how they split the workload. A family-member co-trustee handling beneficiary communication and a professional co-trustee managing investments might agree to allocate a larger share to the professional. If co-trustees cannot agree, a court can allocate compensation based on the services each one actually provided.
Tax Treatment Affects the Net
Whatever a trustee charges, some of it goes to taxes. A nonprofessional trustee, such as a family member serving for one trust, reports the fees as other income on Schedule 1 of Form 1040. A professional trustee in the business of serving as a fiduciary reports the fees as self-employment income on Schedule C and owes self-employment tax on top of regular income tax.1Internal Revenue Service. Publication 525 (2025), Taxable and Nontaxable Income Self-employment tax adds roughly 15.3% to the tax burden on those fees.
Someone who serves as trustee for multiple unrelated trusts, advertises fiduciary services, or holds a professional fiduciary license will almost certainly be treated as being in the trade or business. A sibling serving as trustee for one family trust will not.
The trust itself deducts trustee fees on Line 12 of Form 1041. To qualify, the fees must be administration costs that would not exist if the property were not held in trust.2IRS.gov. Instructions for Form 1041 and Schedules A, B, G, J, and K-1 (2025) Trustee compensation meets that test.
Challenging a Fee That’s Too High
Beneficiaries who believe a trustee is overcharging can petition the court to review the compensation. Judges examine the trustee’s time records, the complexity of the trust, the results achieved, and what comparable trustees charge locally. Filing fees for these petitions commonly range from $50 to several hundred dollars.
When a court finds fees excessive, the available remedies go well beyond telling the trustee to charge less going forward. Under the Uniform Trust Code framework, courts can reduce or deny compensation, order the trustee to restore excessive fees already withdrawn, remove the trustee entirely for persistent overcharging, or surcharge the trustee for breach of fiduciary duty, which can include prejudgment interest.
Documentation is the trustee’s best defense. Detailed time records, clear descriptions of tasks, and transparent billing make it straightforward for a court to confirm the compensation was earned. Trustees who bill in vague lump sums or lack contemporaneous records are far more vulnerable to having their fees reduced, even when the amount charged was actually reasonable.