Trustee Fees 2026: What Individual and Corporate Trustees Charge

Individual Trustee Fees

An individual trustee is a person — typically a family member, trusted friend, or professional in your life — who serves in the trustee role. Their compensation is typically addressed in the trust document.

| ContentTypical CompensationContentLegal StatusContentKey Consideration** | | --- | --- | --- | --- | | Family member / friend serving as trustee — small estate, few assets | Waived or nominal ($500–$2,000 one-time upon trust termination) | Legal: trustee is entitled to 'reasonable compensation' but can waive | Most common scenario; works well for straightforward trusts; family trustees often waive fees especially when they are also beneficiaries | | Family member / friend — complex estate with real estate, business, multiple beneficiaries | 0.5%–1% of trust assets annually, or hourly rate for time spent ($30–$75/hour) | Legal: reasonable compensation is allowable; state guidelines vary | Acknowledge the burden; underpaid family trustees become resentful; overpaid ones create beneficiary disputes; document time spent | | Attorney serving as individual trustee | 1%–1.5% of assets annually or attorney's standard hourly rate ($200–$600/hour) | Legal; attorney should be clear about which services are in trustee role (lower rate) vs. legal work (higher rate) | Expensive but provides professional expertise; risk of billing trustee duties at attorney rates rather than trustee rates — clarify this upfront | | Professional fiduciary (individual, not an institution) | 0.75%–1.5% of assets annually; hourly rates $75–$200 | Legal; licensed in many states | Often a good middle ground between expensive banks and potentially unreliable family; look for state-licensed professional fiduciaries |

Individual Trustees Assume Personal Liability

A trustee who makes investment errors, breaches fiduciary duties, fails to file tax returns, or makes incorrect distributions to beneficiaries can be sued personally by beneficiaries. Corporate trustees carry errors and omissions insurance. Individual trustees typically do not. Before naming a family member as trustee of a complex or high-value trust, ensure they understand the legal responsibilities they are assuming — and consider whether the trust should include a provision for them to hire professional advisors (attorney, CPA, investment advisor) whose fees are paid from the trust.

Corporate Trustee Fees: Banks and Trust Companies

Corporate trustees use standardized fee schedules based on assets under management (AUM). Most use a tiered structure where the percentage decreases as the trust grows larger.

| ContentTypical Annual Fee (AUM %)ContentAnnual Dollar AmountContentNotes** | | --- | --- | --- | --- | | Under $500,000 | 1.5%–2.0% | $7,500–$10,000 | Most corporate trustees have minimum annual fees of $3,000–$5,000 regardless of AUM percentage; for small trusts, the minimum fee may exceed the percentage — making corporate trusteeship economically impractical | | $500,000–$1,000,000 | 1.0%–1.5% | $5,000–$15,000 | Above the typical minimum fee threshold; percentage basis usually begins to apply | | $1,000,000–$3,000,000 | 0.75%–1.25% | $7,500–$37,500 | Core market for most regional bank trust departments; investment management fee may be included or separate | | $3,000,000–$10,000,000 | 0.5%–1.0% | $15,000–$100,000 | Economies of scale begin to favor corporate trusteeship; negotiation on fee schedule more feasible at this level | | Above $10,000,000 | 0.25%–0.75% | $25,000+ | Fully negotiable; private banks and family office services become available; flat fee arrangements more common |

Additional Corporate Trustee Fees Beyond the Base AUM Fee

The base AUM fee is just the starting point. Corporate trustees also commonly charge:

• Acceptance fee (one-time): $500–$2,000 when the bank first takes over as trustee
• Termination/distribution fee: 0.5%–1% of assets distributed when the trust terminates
• Real property management fee: 0.5% of property value annually if trust holds real estate
• Investment management fee (if separate): 0.25%–0.50% of investment portfolio annually (sometimes included in base AUM fee; sometimes billed separately)
• Tax return preparation (Form 1041): $500–$2,000 annually (often contracted to outside CPA)
• Extraordinary services (litigation, contested distributions): Billed at hourly rates

State Statutory Fee Schedules for Individual Trustees

Some states have specific laws governing trustee compensation. While courts can always adjust for reasonableness, these schedules provide a starting reference point:

| ContentStatutory / Common Law StandardContentIndividual Trustee Typical RateContentSource** | | --- | --- | --- | --- | | New York | Statutory fee schedule | 1.05% on first $400K of assets; 0.45% on next $600K; 0.30% above $1M; plus 1% disbursement fee on principal paid out | NY SCPA §2309 | | California | 'Reasonable compensation' standard — no fixed statutory schedule | 0.5%–1.5% annually considered typical for individual trustees; courts evaluate reasonableness case by case | Cal. Prob. Code §15680 | | Florida | 'Reasonable under the circumstances' — factors include risk, nature of assets, time required | 0.75%–1.5% annually considered reasonable; courts look at comparable professional trustee rates | Fla. Stat. §736.0708 | | Texas | 'Reasonable compensation' | 0.5%–1.5% annually typical; no statutory schedule | TX Prop. Code §113.151 | | Illinois | 'Reasonable compensation' | 0.5%–1.5% annually typical | Ill. Trust Code §1006 |

Are Trustee Fees Tax Deductible?

Trustee fees have different tax treatment depending on who pays and what type of trust:

• Fees paid by an irrevocable trust: deductible by the trust on Form 1041 as administrative expenses, reducing the trust's taxable income
• Fees paid by a revocable living trust (while grantor is alive): paid by you personally; deductible only as investment expenses to the extent they exceed 2% of AGI — and the deduction for miscellaneous itemized expenses was suspended by the Tax Cuts and Jobs Act through 2025; check current law
• Fees received by an individual trustee: taxable income to the trustee, reportable on their personal Form 1040; NOT subject to self-employment tax if trustee serves in a personal (not business) capacity
• A family member trustee who is also a beneficiary may choose to waive fees to avoid taxable income — especially when their inherited share would be tax-free and the fee is taxable