Compensation of a trustee is ordinarily governed by the terms of a trust agreement. However, if the trust does not specify a compensation schedule, then Missouri law generically provides that the trustee is entitled to “compensation that is reasonable under the circumstances.” Section 456.7-708, RSMo. If the matter is before a court, the judge can make adjustments up or down if (1) the duties of the trustee are substantially different from those contemplated when the trust was created or (2) the compensation specified by the terms of the trust would be unreasonably low or high. Practically speaking, trustees, and particularly trust companies, will take a few percentage points of the trust corpus as its annual compensation. This is often communicated before the trustee takes on the trusteeship to ensure that all beneficiaries are aware of the costs involved in administration.
In addition to this baseline compensation, trustees are often entitled to other remuneration. They may be reimbursed for expenses that were properly incurred in the administration of the trust. Section 456-7.709, RSMo. They may also request reasonable fees from a beneficiary when responding to inquiries reasonably related to the trust’s administration. Section 456.8-813, RSMo. A trustee needs to exercise caution before compensating himself/herself/itself to ensure that a beneficiary does not allege breach of trust or other mismanagement or waste of the trust’s assets.
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