California Trustee Compensation: What a Trustee Can Charge

California sets no percentage for trustee fees. If the trust states the compensation, that governs. If it is silent, Probate Code section 15681 entitles the trustee to reasonable compensation under the circumstances — and a court can adjust either figure on a proper showing.

The rule, and why there is no percentage

Trust versus probate, side by side

Applying the probate percentages to a trust is the single most common error in this area, and it usually overstates what a trustee may take. The probate schedule is set out here.

What makes compensation reasonable

Section 15681 gives no list, and that is deliberate — reasonableness is judged against what the administration actually required. In practice the factors that matter are the gross value and complexity of the trust, the time genuinely spent, the skill and experience the work demanded, the responsibility and risk assumed, whether the trustee is a professional or a family member, the customary charge for comparable work locally, and the results obtained.

Professional versus family trustees

A corporate trustee publishes a fee schedule and charges an annual percentage of assets under management. A daughter serving as successor trustee has no schedule and is usually doing something closer to a project than an ongoing service. Those are not the same job, and a family trustee who adopts a bank’s percentage is inviting an objection.

Keeping a record is the whole defence

Because the test is what was reasonable for the work, the trustee who logged dates, tasks and hours has an answer and the trustee who did not has an assertion. Contemporaneous records are worth more than a persuasive explanation given a year later, and their absence is the reason many otherwise defensible fees get reduced.

How co-trustees divide it

Not automatically down the middle. Section 15683 provides that unless the trust says otherwise or the trustees agree otherwise, compensation is apportioned among cotrustees according to the services rendered by them. Where one co-trustee has done all the work and the other has been absent, the statute follows the work rather than the title.

When fees become a dispute

Trustee compensation is one of the most common flashpoints in trust administration, and it usually surfaces the same way: a beneficiary sees the figure for the first time in the accounting. Because no percentage governs, there is no obvious benchmark to point at, so the argument becomes evidential — what was done, how long it took, and whether it needed doing at all.

What a beneficiary can do

Object to the fees in the accounting. Compensation taken without authority, or grossly beyond what the work justified, is a loss to the trust like any other, and a surcharge claim under section 16440 is what recovers it. Where the trustee has also been unresponsive or is refusing to account, removal under section 15642 may be the better route, and the two are commonly sought together.

What a trustee should do

Read the instrument first — if it sets compensation, that is the entitlement and inventing a different basis is the error. Keep records from day one. Disclose the fee in the accounting rather than letting a beneficiary discover it. And where the trust’s stated figure has become genuinely inadequate because the job turned out to be far larger than anyone contemplated, section 15680(b) is the route to have it adjusted — by the court, prospectively, rather than by helping yourself.

Related: compelling an accounting, surcharge for excessive fees, the underlying duty, co-trustee disputes, and the probate schedule this is often confused with.