jeff kellner . this course is offered to you at no cost other than the trustee fee which is ...

by Mr. Fabian Wiza 9 min read

Why is it so hard to find cost efficient trustee fees?

Finding cost efficient trustee fees frustrates many people. Wealthy and affluent people find using trustee services daunting. Why? Nobody understands the process of how corporate trustee fees calculations. Nobody understands exactly what a trustee does.

Is there any real competition for a trustee fee?

Either from a trustee fee standpoint or operationally at the company itself. They have never had real competition over the last 700 years. No competition means no pressure to innovate anything. The trick for beneficiaries and/or their advisors rests on peeling back the different components of costs.

How much does it cost to appoint a professional trustee?

If you decide to appoint a Professional Trustee like a legal firm, Trust Company or bank or other financial institution, they’ll likely have their own set fee. What is a standard Trustee fee if you go the professional route? It depends. Normal ranges tend to be somewhere between 1 and 1.5 percent of the estate value.

Are Trust Company fees separated between investment management and trust administration?

They separate their trustee fees between investment management and trust administration. Investment management fees for a trust account offer the greatest profit center to a bank trust company. The time involved for a $2 million trust account vs. $9 million trust account does not vary.

What is not included in the trustee fee?

What was not included are Concierge Services, Meals and Entertainment, Corporate Events etc. Those trustee services find their way into every trustee fee. (Note to reader: Wealth Advisors Trust Company does not offer concierge services, corporate events , or meals and entertainment for beneficiaries.)

What is trustee services?

Trustee Services. The duties, actions, and responsibilities an individual trustee or a corporate trustee must perform outlined in the trust document. These duties are based around trust accounting and trust administration. Trust accounting, trust administration, and investment management. Trustee.

What is advisor friendly trust?

An advisor friendly trust company has two distinct expense areas - trust administration and back office operations. The trustee delegates the trust investment function to a financial advisor. This type of corporate trustee only focuses on trust administration. Generally, they do not offer corporate events, unique speakers, and meals/entertainment services [Note to reader - We do not offer those soft trustee services]. However, they do offer their trustee services under an Assets Under Management fee model. Like a bank trust company they could charge 0.50% for the first $2 million, 0.40% for the next $2 million etc. Some of the them separate their fees for a delegated trusts vs. directed trusts. They carry the same worries of understanding risk and time with their trustee fees. The pricing of quantitative components deals with the complexity of the trust assets and time involved for trust administration. The pricing of qualitative components become easier because they do not hold themselves for offering those type of soft trustee services. The concept of cost efficient trustee services has not been a natural concept. Almost 100% of advisor friendly trust companies were founded by former bank trust company executives [Note to reader - not us. We are a former ex-Ernst & Young team]. When considering an advisor friendly trust company the trust fees can be easily separate between risk and time.

What is a trust company?

Trust Company. These companies are corporate trustees that can be affiliated or unaffiliated with a bank offering trustee services for personal trusts, such as revocable trusts, irrevocable trusts, and/or charitable trusts. See examples for "Advisor Friendly Trust Company" or "Independent Trust Company.".

What is corporate trustee?

Definition of a Corporate Trustee. Every corporate trustee uses terms people do not normally use, partly out of laziness and partly by design. There are 7 different ways to describe a corporate trustee. This can lead to confusion for an individual and/or a financial advisor when you're looking for a trustee.

What is a delegated trust?

There are 7 distinct factors between risk and time: 1) Directed or delegated trust: A delegated trust, 95% of all trusts, means the trustee delegates the investment duties to a financial advisor.

What is a trustee in a trust?

Trustee. Used most often as a short phrase for anyone performing the duties outlined in a trust document for individuals. A trustee could be a friend or family member, advisor friendly trust company, bank trust company, etc. Independent Trust Company.

What is trustee fee?

What Are Trustee Fees? Trustee fees are the payments that’ll be made to your appointed Trustee in exchange for the service they’ll provide as they fulfill their duties in the role. A Trustee doesn’t have to be a person - you can appoint a bank or professional wealth management company as Trustee if you want to.

Why is choosing a trustee important?

And with everything that goes into creating your Estate Plan, choosing a Trustee can be one of the most complicated aspects, because it’s such a complex role and you must truly trust the person you select.

What is UTC in trust fees?

Trustee fees can be affected by state norms, so it’s beneficial to understand a little bit about the state you’re in. There’s also the Uniform Trust Code (UTC), which some (but not all) states have adopted in effort to standardize all things related to Trusts...including Trustee fees!

Is there reasonable compensation for a trustee in California?

For example, in California, reasonable compensation for a Trustee is stated in the state’s probate code. There, estates can be quite large, which would make actual compensation (though not necessarily the percentage fee) understandably larger as well.

Is there a formula for trustee fees?

And, knowing how to calculate Trustee fees isn’t as simple as you may think. Unfortunately , there isn’t one simple formula or percentage that magically computes a rate.

Can a trustee take compensation?

There can be some real benefits to using a trusted person in your life as your Trustee. And it’s not uncommon for a personal Trustee to not take any compensation at all. Remember, you can (and probably should) outline compensation clearly as a defined detail inside the Trust - this way, there are no questions.

Is estate planning confusing?

Estate Planning can be confusing and feel somewhat overwhelming, but our mission is to make it accessible and easy, so you can feel confident and the choices you’re making …including deciding on Trustee fees.

How are trustee fees taxed?

First, trustee fees are tax deductible to the trust. And second, trustee fees are considered taxable income for the trustee.

What expenses do trustees pay out of pocket?

It’s also important to note that trustees are entitled to reimbursement for any expenses they pay out of pocket. That includes things like travel expenses, storage fees, taxes, insurance or other expensesthey incur related to the management of the trust.

How often do trustee fees come out of a trust?

Instead, they’re paid out of the trust’s assets. Depending on what you specify in the trust document, they can be paid once per year or biannually, though it’s more common for trustee fees to be paid quarterly.

What does a trustee do?

Trustees assume certain responsibilities when managing assets and fees help to compensate them for their time and efforts. You also may benefit from the hands-on guidance of an expert financial advisorin choosing a trustee, planning your estate and exploring how trustee fees will affect your estate.

What is the grantor's role in a trust?

When writing a trust document, the grantor can set the terms of payment, including putting a limit on how much can be paid out in trustee fees. They can also set different payment terms for any successor trusteesnamed in the document as well.

What is the role of a trustee in a trust?

Their main job is to ensure that the assets held in a trust are managed according to the trust grantor’swishes (meaning the person who created the trust) on behalf of the trust’s beneficiaries.

What are trustees entitled to?

Trustees are entitled to reasonable compensation, though it varies by location and type of account. What are the typical fees paid to trustees? Menu burger.

Who pays for the instructional course?

Persons other than the debtor may pay for the instructional course, as long as such payments comply with applicable laws, regulations, and ethical requirements (such as state laws and rules concerning attorney ethics).

What percentage of income is required for fee waiver?

Fee waiver policies may vary by provider. At a minimum, however, a debtor whose household income is less than 150 percent of the poverty level is presumptively entitled to a fee waiver or fee reduction.

What percentage of poverty is eligible for fee waiver?

At a minimum, debtors whose household income is less than 150 percent of the poverty level are presumptively entitled to a fee waiver or fee reduction, based on the debtor’s actual ability to pay. Ability to pay shall be determined based on income information the debtor submits to the provider.

Can debtor education providers increase their fees?

A: A debtor education provider may not increase its fees without prior USTP approval. To request approval to increase fees, a provider must submit an amended application setting forth the proposed increased fees, as well as the reason for the increase.

Do providers have to inform debtors of fees?

A: A provider must inform debtors that services are available for free or at a reduced rate, based on a debtor's ability to pay, before providing any information to or obtaining any information from a debtor, and before beginning a debtor education session. Fee waiver policies may vary by provider.

Does the USTP endorse or recommend debtor education providers?

A: To assist individuals in finding a debtor education provider, the USTP maintains a list of approved providers on its Web site. The USTP cannot endorse or recommend any particular provider on its list of approved providers, or guarantee the quality of its post-filing debtor education instruction or services.

Can you pay for debtor education?

A: Yes. Persons other than the debtor may pay for debtor education, as long as such payments comply with applicable laws, regulations, and ethical requirements (such as state laws and rules concerning attorney ethics).