Serving as a family trustee is often described as an “honor” but, in reality, it is also a demanding legal job. A trustee is responsible for managing trust assets, following the instructions in the trust document, communicating with beneficiaries, keeping detailed financial records, filing tax returns and complying with California law.
In many cases, trustees must also oversee real estate, coordinate repairs or property sales, work with accountants and attorneys, and handle disagreements among family members. Because of the time, effort and potential stress involved, California law recognizes that trustees are generally entitled to be paid.
California does not set a fixed fee or percentage for trustee compensation. Instead, the California Probate Code says a trustee is entitled to “reasonable compensation under the circumstances” unless the trust document specifies otherwise (Probate Code section 15680). In simple terms, this means there is no one-size-fits-all rule. What is reasonable depends on the work involved.
The law intentionally uses flexible language because trusts vary widely. Some trusts hold only a bank account and distribute funds once a year. Others include multiple properties, investment accounts, businesses or ongoing distributions to several beneficiaries.
When deciding what compensation is reasonable, California courts typically look at:
- The size and complexity of the trust
- The type of work performed by the trustee
- How much time the trustee spends on administration
- Whether the trustee has special skills, such as accounting, legal or real estate expertise
- The level of responsibility and risk involved
Although there is no official statewide fee schedule, certain ranges are commonly accepted in California and often used as practical benchmarks.
Percentage-based fees: Many family trustees receive an annual fee equal to 0.5 to 1 percent of the total trust assets. For example, a trustee managing a $2 million trust might receive $10,000 to $20,000 per year if the trust requires active management.
Hourly fees: Some families prefer hourly compensation, especially for smaller or short-term trusts. In California, non-professional family trustees commonly charge $30 to $75 per hour, depending on the complexity of the tasks and the trustee’s experience.
Professional comparison: Corporate trustees and professional fiduciaries often charge 1 to 2 percent annually, plus additional fees for special services such as tax preparation, real estate sales or litigation. While family trustees usually charge less, these rates help courts and families evaluate what is fair.
If trustee compensation is ever questioned, California probate judges often look closely at records. Trustees should keep: time logs showing work performed; receipts for expenses; notes describing major decisions and actions.
Good documentation helps justify compensation and reduces conflict with beneficiaries.
Being a family trustee is real work and California law recognizes that trustees deserve fair compensation. What is “reasonable” depends on the trust, the work involved and local practices. Clear communication, thoughtful planning and good recordkeeping help ensure trustees are paid fairly while protecting both family relationships and trust assets.
Send your questions to ccolan@colanlegal.com and use “Alpine Mountaineer estate planning question” as the subject. We’ll answer your questions in our upcoming issues. This article is provided by your local estate planning attorney, Corina Colan. The Law Office of Corina I. Colan / (909) 265-3315 / www.colanlegal.com
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