Can a Trustee Be Paid for Managing and Selling the Trust House?

Being a successor trustee is real work. You may secure the house, keep up insurance and taxes, clear out belongings, handle repairs, and work through a sale, often while grieving and juggling your own life.

I'm Jeanette Nelson, a REALTOR® with Jeanette Nelson Real Estate, Keller Williams Realty, serving Orange County, Huntington Beach, Costa Mesa, Fountain Valley, and surrounding areas. Trustees often ask me whether they can be paid for this time, usually because they feel uneasy asking their siblings. A clear answer from the trust document and an attorney helps your family avoid hard feelings later.

This is general information, not legal or tax advice. A trust attorney and a CPA should guide your family's specific situation.

Start there. California Probate Code section 15680 says that if the trust provides for the trustee's compensation, the trustee is entitled to that compensation.

The court can step in. Section 15680 allows the court to fix or allow greater or lesser compensation in some situations, such as when the trustee's duties are substantially different from what the trust contemplated, or when the trust's terms would be inequitable or unreasonably low or high.

Some trusts set a fee. Some say the trustee serves without pay. Some say nothing at all.

Probate Code section 15681 says that if the trust does not specify compensation, the trustee is entitled to reasonable compensation under the circumstances.

The law does not give a formula. What is reasonable can depend on the time spent, the size and complexity of the trust, and the work involved. A trust attorney can help you decide what fits your situation and how to document it.

Some family trustees choose to waive a fee. That is a personal decision, and an attorney and CPA can explain the effects either way.

Generally, yes, for proper expenses. Probate Code section 15684 says a trustee is entitled to repayment out of trust property for expenditures properly incurred in administering the trust.

Common examples while selling a house include:

• Property taxes and insurance you paid personally
• Utilities to keep the house safe and ready to show
• Repairs, cleaning or yard care
• Locksmith and security costs

Keep every receipt. Reimbursement and compensation are different things, and your records should show which is which.

They are entitled to information. Probate Code section 16060 says the trustee has a duty to keep beneficiaries reasonably informed of the trust and its administration. Section 16062 generally requires the trustee to account at least annually, at the end of the trust, and when there is a change of trustee, with some exceptions.

Being open early about any fee and expense reimbursements tends to keep the family on the same page. My article on selling when not all beneficiaries agree covers what happens when they don't.

Talk to your CPA about this. As a related example, IRS Publication 525 says all personal representatives must include in gross income fees paid to them from an estate, and that the fee is not includible if it is waived. Your CPA can explain how trustee fees are reported for you.

The trustee's own compensation is separate from the costs of selling, like escrow, title and agent commissions, which are typically paid from the sale. My article on how to sell a house in a trust walks through the steps, and my article on the successor trustee role explains your duties.

If you are a successor trustee getting ready to handle the family home, I'd love to have a private planning conversation with you and your family about the house, its timeline and your options. Call or text me at 714.366.8575 | DRE: 01397168, or contact me. You can also read about how I help on our trust sales page. Jeanette Nelson is a REALTOR® with Jeanette Nelson Real Estate, Keller Williams Realty, serving Orange County, Huntington Beach, Costa Mesa, Fountain Valley, and surrounding areas.