Is My Trustee Overcharging?

Posted July 12, 2019

Question:

The trustee for my uncle’s trust is a relative by marriage. My siblings and I are beneficiaries of my uncle’s trust. Our uncle told us for years that his trustee was charging him an unreasonable amount for services but did nothing about it. Once our uncle passed, we received the accounting a year later. The total trust was $592,000. Fiduciary charges were $25,695. There are separate fees for an accountant. He also has listed Visa charges of $7,000 without specifying what they are for. Is it appropriate for us to ask why his charges were so excessive?

Photo by Olga DeLawrence on Unsplash

Response:

Certainly it’s appropriate to ask these questions. But I have two questions about what you’re describing. First, are these charges for just a single year or do they cover a longer period of time? Second, are these charges simply for administering the trust or was he involved in administering your uncle’s estate as well?

If the trustee fees were for a single year, they seem high at almost 4% of the trust principal. However, even if they were for just a year, if they also involved administering your uncle’s estate, that might not be out of line. That could involve a lot of time and effort in the first year. So, ask your questions, but keep an open mind.

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