Topic: Trustee and Executor Compensation
ESTATE PLANNING; DO TRUSTEE AND EXECUTORS GET PAID?
By Milton Babirak, JD, LLM | Babirak Carr, PC | Sterling, VA
Will. If you have a will, simple or complex, you have named an executor to administer your estate upon your death. You may have also named a successor executor in case the first named executor is unable or unwilling to act as executor. In your will, you may have a testamentary trust and for that trust, you have named a trustee and perhaps a successor trustee.
Revocable Trust. If you have a revocable trust, you have named a trustee and perhaps a successor trustee to administer the revocable trust upon your death. If you have a revocable trust, you also have a pour over will and in that pour over will, you have named an executor and successor executor.
Compensation? These named executors and trustees can be a spouse, family member, friend, trust department of a bank or trust company. Whoever they are, they will someday take on the obligations and duties of their position. That can be a lot of work and they might want to get paid for all their work. Can they get paid for their work? How much?
Specific Provisions. Usually the will or trust includes a specific provision on executor and trustee compensation. Sometimes these provisions are straightforward: An individual executor or trustee can be paid “reasonable compensation” from the assets of the estate or trust and get reimbursed for reasonable and necessary expenses. If the will or revocable trust appoints a trust department of a bank or a trust company, the specific provision of the will or trust usually provides that the bank or trust company gets paid compensation according to it’s published fee schedule. Of course, compensation provisions can be made more specific and more elaborate if the circumstances warrant. However, frequently and surprisingly, individuals who act as executor, trustee or both, do not seek compensation for their services.