Do Trustees Get Paid
Trustees usually get paid an hourly but sometimes they will be compensated a percentage. As a trustee you must keep a detailed log of all your activities, including timeframes and tasks, to ensure that you receive full reimbursement for your services.
Do Trustees Get Paid and How Much Should they be paid?
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Are you Considering to be a Trustee and hold Fiduciary Duty?
How Much Do Trustees get paid?
Glad you are here. A Trustee can get paid based on the work that is provided based on a percentage of the estate or, most likely, an hourly fee, but there are no set trustee fees. The Trust assets pay you and not the beneficiaries, and therefore strict bookkeeping is mandatory.
Some Trustee tidbits to consider
You might think that it is a lucrative position to manage a Trust.
Remember this small tidbit: When you choose to become a Trustee, you will handle money and people! Which is the more significant challenge? You might think managing the funds might be the more difficult task, but managing people (beneficiaries) may prove to be a more substantial challenge.
Can a Trustee withdraw money from a trust?
There have been many court cases on this topic, and the Trustee cannot withdraw money for self-dealing, i.e., personal use! A trust is a private legal agreement, which is between two parties. (The settlor and the beneficiaries). The Trustee has a fiduciary duty to side on the beneficiaries before their interests and should disclose all accounts are reports to the beneficiaries.
What are the duties of a Trustee?
First and foremost, you will want to read the trust document in its entirety. You may even want to reach out to counsel. Hess-Verdon & Associates has been helping families in the Southern California area for 30 years! You may call 949-706-7300. When you read the trust, it will outline the rules in which you will operate.
So basically the duties of the Trustee include, but not limited to, the following:
- Create a checking account of the trust. All income and expenses should go through this account to keep a faithful bookkeeping practice.
- Remember, you have a fiduciary duty to the beneficiaries. You will want to keep them abreast of the changes at least annually, but if they ask for information in a reasonable amount of time. (Know the state laws)
- Do not mix your expenses with the expenses of the trust. Mixing can cause a breach of contract and can adversely affect the amount you get paid.
- Do keep in regular contact with the beneficiaries to understand their needs.
- Do file annual income tax returns for the trust.
- Get professional advice.
Who can be a Trustee?
To be chosen as a Trustee is an honor, but it comes much responsibility to the settlor’s wishes and understanding of the needs of the beneficiaries.
So, who can be a Trustee? Well, the characteristics of a Trustee could be the following: trustworthy, responsible, financially stable, attention to detail, and gets along with people, knows when to reach out to counsel.
Can a Trustee also be a beneficiary?
Yes, a beneficiary can also be the Trustee, and many times there may be more than one trustee. (co-trustee). It’s crucial, however, that both the Trustee and co-trustee never mix their personal income and expenses of that of the trust. When it comes time to audits, if not done correctly, it can harm both Trustees via paying back misappropriated funds.
Are the Trustee’s compensation taxable income?
Trustee fees are an income tax deduction for the trust but taxable income to you, the Trustee. You will declare your fees on your form 1040 on line 21.
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