Most trustees are entitled to payment for their work managing and distributing trust assets—just like executors of wills. Typically, either the trust document or state law says that trustees can be paid a "reasonable" amount for their work.
The trustee’s payment comes from the trust assets. And because as trustee, you’re in control of those assets, that means you’re in charge of paying yourself.
You’ll probably also be in charge of determining the amount of your own compensation. Some trusts set out a flat or hourly fee for the trustee, but that’s not too common. State law is unlikely to be much help either; many states set out rules for executors, but not for trustees.
If it’s left to you to come up with a "reasonable" fee, here are a couple of ways you might go about the task:
After all, an executor’s work is often very similar to that of a trustee. Under state law, fees are usually calculated either as a percentage of the total value of trust assets or a percentage of the transactions you make (the money that goes in and out of the trust).
It’s hard to argue with taking payment for your time and effort. Set a rate that’s appropriate given the kind of work you’re doing, and then keep careful track, in writing, of how many hours you spend on trust business. Don’t charge a professional rate—the hundreds of dollars an hour that a lawyer or financial advisor might charge—unless you have and are using special skills that justify it.
How to calculate a reasonable fee is one question—whether or not you should accept it is a wholly separate issue. If you’re legally entitled to compensation, why not take it? Many trustees do, and it’s certainly appropriate to be paid for the real work that comes with serving as a trustee. Handling other people’s money is a serious responsibility.
There are, however, some circumstances in which you might want to choose to forgo compensation.
There is always one very straightforward financial consideration: a trustee’s compensation is taxable income. You’ll have to report it on your annual income tax return, and pay tax on it. An inheritance, on the other hand, isn’t taxable income. So if you’re inheriting everything or almost everything in the trust, there’s usually no reason to call some of the money a "fee"—you’ll only end up paying more tax than you have to.
Other factors stem from emotions, not money. If you think other inheritors or family members will resent you for taking a fee, and you’d rather avoid the strain on relationships, you might decide that a fee just isn’t worth it. Consider it just one more family responsibility, which you meet because it’s the right thing to do, not because you’re being paid for it.