Trustee Fees in 2026: How Much Do Trustees Get Paid?

Serving as a trustee is real work with real liability, and the law recognizes that by entitling trustees to be paid. The question families argue over is how much. In 2026 the answer depends less on the size of the trust alone and more on three things: what the trust document says, what state law requires when the document is silent, and what a corporate trustee would charge for the same job.

Understanding trustee compensation matters to both sides of the relationship. Trustees need to know what they can reasonably claim before they take a dollar, and beneficiaries need to know how to spot an excessive fee in an accounting. This guide explains the reasonable-compensation standard, the state schedules that replace it in some states, how corporate and individual trustees compare, and how fees are justified and reported. It also covers how trustee fees interact with trusts funded by life insurance.

The Starting Point: The Trust Document

The first place to look for trustee compensation is never a statute. It is the trust instrument itself. A trust that sets the trustee’s pay — as a percentage, an hourly rate, a flat amount, or by reference to a corporate trustee’s published schedule — governs the question. A trust that says the trustee serves without compensation governs too. Only when the document is silent do the statutory and case-law rules apply, and even then a court can adjust the result.

When the document is silent, the governing standard in most states comes from the Uniform Trust Code, which has been adopted in substantially similar form by more than 35 states and provides simply that a trustee is entitled to compensation that is reasonable under the circumstances. In the rest, case law or a statute fills the gap, often with a formula.

How Much Trustees Get Paid

Compensation generally takes one of three forms. The table below shows the ranges practitioners and courts treat as defensible in 2026.

A useful benchmark is that corporate trustees charge roughly 1.0% to 1.5% annually on the first million dollars, then scale down as the trust grows. Any individual trustee rate at or below that range is automatically defensible, because the individual costs the trust less than the institutional alternative would.

State-by-State Trustee Fee Rules

A handful of states replace the reasonable-compensation standard with a fixed schedule. These are the ones families most often ask about.

Even in the states with a statutory schedule, the schedule is a default, not a ceiling that cannot be raised or lowered. Courts retain the power to adjust a fee that is unreasonable given the work actually performed.

Corporate vs. Individual Trustee Fees

Choosing between a bank and a family member is partly a fee decision. The structures differ enough that a direct comparison is worth making before the trust is funded.

The fairest comparison is not the headline percentage. It is the corporate fee against the individual trustee’s commission plus the cost of the investment adviser the individual would need to hire. Once that adviser is added, an individual trustee’s apparent savings often shrink.

What Courts Consider When Setting a Fee

When the fee is not fixed by the document or a statute, courts fall back on a framework inherited from the classic Massachusetts treatise and known as the Loring factors. Most states evaluate some version of this list.

1. Size and complexity of the trust. A trust holding a business, real estate, and international tax exposure justifies more than one holding index funds.
2. Nature and amount of work required. Active management and beneficiary communication command more than passive administration.
3. Skill and expertise demanded. A trustee using specialized tax or legal knowledge can charge for work that would otherwise require hiring professionals.
4. Time actually spent. Courts want time records, not estimates.
5. Results achieved. A trustee who grew assets or resolved debts efficiently has a stronger case.
6. Local custom. What corporate trustees charge for similar trusts in the same market is a benchmark.
7. Fidelity to duty. Trustworthy conduct supports full compensation; any breach cuts against it.

How Trustees Report and Justify Fees

Compensation is only defensible if it is documented. A trustee who wants to be paid without a fight should follow a disciplined process from day one.

• Keep contemporaneous time or activity records showing the work performed.
• Value trust assets consistently — quarterly or monthly — so a percentage fee is based on a defensible figure.
• Send beneficiaries an annual accounting that states the fee taken and when it was taken.
• Benchmark the fee against corporate trustee schedules or comparable local fiduciaries.
• Disclose extraordinary services that carry separate fees, such as litigation or real estate sales.

A trustee who takes a fee properly under the document or a statute is usually sustained on review. A trustee who takes an undocumented or excessive fee risks a court order reducing the fee, requiring repayment, and in serious cases removing the trustee. In Texas and other states, a breach of fiduciary duty can cost the trustee the entire fee.

Trustee Fees and Life Insurance Trusts

Trustee compensation becomes especially relevant when a trust exists mainly to hold a life insurance policy. An irrevocable life insurance trust, or ILIT, is often administered by a family member who may serve for little or nothing, but the trust still needs someone to collect premiums, manage cash contributions, and handle the death benefit. When a corporate trustee administers an ILIT on a large policy, its percentage fee applies to the policy’s value and the trust’s other assets, not just the cash premium, so the compensation can be material to the estate plan. Families setting up such a trust should decide on compensation before the policy is transferred in, and should document the choice in the trust instrument so there is no dispute later.

Frequently Asked Questions

How much do trustees get paid in 2026?

Individual trustees are entitled to reasonable compensation, commonly 0.5% to 1.5% of trust assets per year or an hourly rate of $100 to $350. Corporate trustees typically charge 0.5% to 2% of assets under management annually, with annual minimums of $2,500 to $5,000.

Do family members serving as trustee get paid?

They may. If the trust document authorizes compensation, a family trustee can take a reasonable fee, though many serve for free. If the document is silent, state law generally still entitles them to reasonable compensation.

What is reasonable trustee compensation?

Courts weigh the size and complexity of the trust, the work required, the trustee’s skill, the time actually spent, and what corporate trustees charge locally. A rate at or below the corporate benchmark is generally defensible.

Does a trustee have to provide an accounting of fees?

Yes. Trustees must keep records and account to the beneficiaries, showing what was taken and when. Beneficiaries can object to excessive fees in the accounting proceeding or petition the court.

Can a trustee’s fee be reduced or denied?

Yes. A court can reduce or deny compensation if the trustee breached fiduciary duties, charged an unreasonable amount, or performed poorly. Documented process and accurate time records protect the fee.

Are trustee fees taxable?

Trustee fees are ordinary income to the trustee and are generally deductible by the trust as an administration expense. A one-time family trustee fee is usually not subject to self-employment tax.

Related Resources

• Uniform Law Commission — Uniform Trust Code — the model statute behind most state compensation rules.
• IRS Publication 559 — Survivors, Executors, and Administrators — taxation of fees and estate administration.
• Consumer Financial Protection Bureau — guidance on fiduciary and trust services.

Trustee fees sit inside a larger estate plan. Start with our guide to the executor of a will and how probate costs add up, then review living trusts and how life insurance avoids probate. Families with special needs beneficiaries should also read about the special needs trust.

Protect the People Your Trust Serves

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Related reading: how long probate takes.