One of the questions I regularly hear from trustees and beneficiaries is surprisingly simple: How much is a trustee allowed to pay themselves in Florida?
The answer is not a fixed percentage.
Unlike some probate fees that have statutory schedules, Florida law generally provides that a trustee is entitled to reasonable compensation under the circumstances when the trust itself does not specify how the trustee should be paid. What is “reasonable,” however, can become a significant source of disagreement between trustees and beneficiaries.
As a Miami Lakes trust attorney, I help trustees understand their responsibilities and beneficiaries determine whether fees being charged to a trust are appropriate.
Does Florida Law Set a Trustee Fee?
Florida Statute § 736.0708 governs trustee compensation. If the trust document specifies the trustee's compensation, the trustee will generally be entitled to the amount or method of compensation provided in the trust.
If the trust is silent, the trustee is entitled to compensation that is reasonable under the circumstances.
This is important because there is no universal rule that a Florida trustee automatically receives 1%, 2%, or any other particular percentage of the trust.
Instead, reasonable compensation depends on the circumstances surrounding the particular trust administration.
What Determines Reasonable Trustee Compensation?
Several factors may be relevant when determining whether trustee compensation is reasonable, including:
- The value and nature of the trust assets
- The complexity of the trust administration
- The amount of time devoted to trustee duties
- The trustee's experience and skill
- Investment and property-management responsibilities
- The number and needs of beneficiaries
- Tax, accounting, business, or litigation issues affecting the trust
- Extraordinary responsibilities undertaken by the trustee
- The results obtained during the administration
Managing a relatively simple trust consisting primarily of a brokerage account may involve considerably different responsibilities than administering a trust containing businesses, multiple properties, complicated investments, or disputes among beneficiaries.
What If the Trust Specifies the Trustee's Compensation?
The trust document should always be the starting point.
Florida law generally honors compensation provisions contained in the trust. However, a court may permit compensation that is higher or lower than the amount specified if the trustee's duties are substantially different from what was contemplated when the trust was created or if the specified compensation would be unreasonably high or low.
This is another reason I encourage clients creating trusts to think carefully about trustee compensation provisions rather than treating them as boilerplate.
Can a Trustee Receive Additional Compensation?
Potentially, yes.
Florida law recognizes that a trustee may perform services beyond ordinary trustee responsibilities. When a trustee renders other services connected with administration of the trust, reasonable additional compensation may be permitted for those services.
That does not mean a trustee has unlimited authority to create additional fees. Trustees remain fiduciaries and should maintain clear records supporting compensation and expenses paid from trust property.
Can Beneficiaries Challenge Trustee Fees?
Yes.
A Florida court can review the reasonableness of compensation paid to a trustee as well as compensation paid to attorneys, accountants, investment advisers, and other professionals employed by the trustee.
Importantly, when compensation is challenged under Florida Statute § 736.0206, the trustee bears the burden of establishing the propriety of the employment and reasonableness of the compensation.
This makes good recordkeeping extremely important. Trustees should document the work performed, significant decisions made, professionals retained, and compensation received.
What About an Attorney Who Serves as Trustee?
Florida has special rules when an attorney who drafted or supervised execution of a trust, or certain persons related to that attorney, is appointed as trustee.
Unless an exception applies, specific disclosures must be made to the settlor before execution of the trust, including disclosure that other individuals or institutions may serve as trustee, that trustees may receive reasonable compensation, and that trustee compensation is separate from attorney's fees for legal services. Florida law also requires a written acknowledgment of the required disclosures.
Talk to a Miami Lakes, Florida Trust Attorney
Trustee compensation should be addressed proactively rather than after a dispute develops.
At Gold Legacy Law, PLLC, I work with families throughout Miami Lakes, Broward County, Miami-Dade County, and South Florida on estate planning, trust administration, and trust disputes. Whether you are creating a trust, serving as trustee, or are a beneficiary concerned about trustee compensation, understanding the trust document and Florida law can help prevent unnecessary conflict.
If you have questions about trustee compensation in Florida, contact Gold Legacy Law, PLLC to discuss your trust and the responsibilities involved in its administration.
Disclaimer: This article is provided for informational purposes only and does not constitute legal advice. Reading this content does not create an attorney-client relationship between you and Gold Legacy Law. For legal advice regarding your personal situation, please contact our office to schedule a consultation.
