Contact Us for a Free Consultation 714-374-2244

The Latest from Susan Katzen

When Is It OK for an SNT Trustee to Be Compensated?

Posted by Susan A. Katzen | Mar 24, 2022 | 0 Comments

Question: Should a special needs trust (SNT) trustee be paid, and, if so, how much?

Answer: It depends.  The demands on a trustee can vary widely, depending on the size and complexity of the trust. Some family members serving in this role might simply oversee distributions and not need to charge anything at all for their time. But often the duties of a trustee can extend way beyond this scenario and warrant financial compensation — even for nonprofessional trustees who are family members. Such tasks can include making investment decisions about the trust's assets, arranging distributions to beneficiaries, paying taxes and other bills, and preparing an extensive annual report on the trust's income and outlays.

So how much can busy trustees expect to be paid? Again, it depends. Complicated trusts require professional trustees, and these generally receive between 1 and 2 percent of the value of the trust each year. Thus, the annual trustee's fee for a million-dollar-trust would be anything from $10,000 to $20,000. A nonprofessional trustee generally charges considerably less than this — often set at 25 percent of the professional rate — unless the duties are extensive. Another difference is that nonprofessionals are usually compensated according to the time they put in, on an hourly basis.

Trustees, both professional and nonprofessional, are also entitled to submit bills for expenses, such as time spent traveling or preparing a property for sale.

But whoever the trustee is, it is important to check the trust documents, which should specify the terms of payment. If a trust is under the supervision of a court, payment terms must be approved by the court. Some trust agreements will dictate that a trustee receive “reasonable” compensation. To determine what qualifies as “reasonable,” a trustee, or those who are setting up a trust in the first place, might consider consulting an estate planning lawyer in their state.

Above all, whether the trustee is professional or nonprofessional, and regardless of that person's compensation, it is imperative that that person maintains good bookkeeping that clearly details the work done on behalf of the beneficiary.

Your special needs planner can help you choose a trustee, suggest a fair rate of compensation, and answer any other questions about the trust and its requirements.

If you have any questions about caring for your special needs loved one, give us a call at 717-374-2244 or fill out this form and we'll call you back. 

About the Author

Susan A. Katzen

"I firmly believe our clients should be treated the way I would want my own family members to be treated. As a result, not only have I put together a compassionate and highly skilled team of people, but together we have served families from the grandparents down to the grandchildren. My staff and...


There are no comments for this post. Be the first and Add your Comment below.

Leave a Comment

Contact Us Today

The Law Office of Susan A. Katzen is committed to answering your questions about Estate Planning, Special Needs Planning, Settlement Planning, Trust Administration, Probate, and Conservatorships issues in Newport Beach, California.

We offer a free consultation for qualified clients and we'll gladly discuss your case with you at your convenience. Contact us today to schedule an appointment.

Office Location

The Law Office of Susan A. Katzen
1301 Dove Street, Suite 750
Newport Beach, CA 92660
949-732-3524 (fax)