Do Trustees Get Paid?

Trustees do not usually receive payment simply for taking on the role. Lay trustees generally act without charging for their time, although they can recover reasonable expenses incurred while administering the trust. Professional trustees and trust corporations may receive remuneration where the trust document or the law authorises it.

Whether a trustee can be paid depends on the terms of the trust, the type of trustee involved and the services they provide. Any payment must be properly authorised and reasonable in the circumstances.

This guide explains the rules that apply to trustee payments, professional trustee fees and expenses in private trusts in England and Wales. Different rules apply to charity trustees, who should refer to the official guidance from the Charity Commission.

Do Trustees Usually Get Paid?

Most lay trustees carry out their duties without receiving payment. This often applies where a relative, friend or other trusted person has been appointed to manage assets for the beneficiaries.

Trustee duties may include managing trust property, keeping accounts, making investment decisions, communicating with beneficiaries and distributing assets. Taking on these responsibilities does not automatically entitle a trustee to remuneration.

A trustee must identify a clear legal basis before taking payment from the trust fund. Authority may come from:

• The trust document
• The Trustee Act 2000
• An order of the court
• A legally effective agreement involving the trustees or beneficiaries

The position differs for professional trustees. A solicitor, accountant, trust company or other professional may be entitled to charge where the trust document contains a professional charging clause or the statutory requirements apply.

Trustee remuneration is also different from reimbursement of expenses. A trustee may be able to recover properly incurred costs even where they have no right to charge for their time.

When Can Trustees Be Paid?

A trustee can receive payment where the trust document, legislation, the court or another legally effective arrangement provides authority.

The starting point is usually the trust document, which may be a will, trust deed or another instrument governing the trust. It may contain a professional charging clause explaining:

• Which trustees can receive payment
• Which services they can charge for
• How fees should be calculated
• Whether approval is required
• Whether any limits apply

A general power to manage the trust does not necessarily give a trustee the right to charge. The payment must fall within the wording of the charging clause or another recognised legal basis.

Professional trustees may also have a statutory right to reasonable remuneration under the Trustee Act 2000. A trust corporation may be entitled to payment for services provided to a private trust, subject to the trust document. An individual acting in a professional capacity may also receive remuneration where they are not the sole trustee and every other trustee agrees in writing.

Professional status alone does not make every fee recoverable. The work must fall within the trustee’s profession or business, and the amount charged must remain reasonable.

Factors that may affect whether remuneration is reasonable include:

• The nature and value of the trust assets
• The complexity of the administration
• The work required
• The time reasonably spent
• The trustee’s expertise and responsibility
• The usual charges for comparable work

Trustees should keep clear records of the work completed, the time spent and the basis on which fees have been calculated. Where written agreement is required, it should set out the services covered, the charging basis and any limits or review arrangements.

A trustee receiving payment also has a personal financial interest in the decision. The trustees should manage that conflict properly, record the basis for payment and make sure the trust accounts clearly show the sums paid.

Trustee Expenses vs Trustee Remuneration

Trustee expenses and trustee remuneration are not the same.

Expenses are costs that a trustee has properly incurred while administering the trust. Reimbursement returns the trustee to the financial position they would have been in had they not paid the cost personally. It does not reward them for carrying out their duties.

Reasonable expenses may include:

• Travel costs connected with trust business
• Postage, printing and administration costs
• Valuation fees
• Insurance or property maintenance costs
• Professional fees paid on behalf of the trust

Trustees should retain receipts, invoices and other evidence showing why the expense arose.

Remuneration, by contrast, is payment for the trustee’s time, expertise or services. It may take the form of an hourly rate, a fixed fee or another authorised charging arrangement.

For example, a lay trustee who travels to inspect trust property may be entitled to recover reasonable travel costs. They would not automatically be entitled to charge for the time spent travelling or carrying out the inspection.

Trust accounts should distinguish clearly between expenses and remuneration. This helps trustees and beneficiaries understand what each payment covered, who received it and which power authorised it.

Can Professional Trustees Charge Fees?

Professional trustees can often charge fees for work carried out on behalf of a private trust, but they must identify the legal basis for payment.

A professional trustee may be a solicitor, accountant, trust company, financial professional or another person acting in the course of their profession or business.

Many professionally drafted wills and trust deeds contain a charging clause. Depending on its wording, the clause may allow a professional trustee to charge for specialist work and for administrative tasks that a lay trustee could have completed.

The clause may limit:

• Who can charge
• The work covered
• The charging method
• The approval required
• The circumstances in which payment is permitted

Where the trust document does not provide a complete answer, the Trustee Act 2000 may apply.

Professional trustee fees may be calculated through hourly rates, fixed fees, periodic administration charges, asset-based fees or a combination of these methods. The charging method should be transparent and appropriate for the work undertaken.

The value of the trust does not always reflect the complexity of the administration. A high-value trust holding a small number of straightforward investments may require less work than a lower-value trust containing businesses, property or assets subject to dispute.

A professional trustee may also carry out work in more than one capacity. For example, a solicitor appointed as trustee may undertake general trustee administration while their firm provides separate legal services. The trust accounts should distinguish between trustee remuneration, professional fees, expenses and payments to third-party advisers.

What Does the Trustee Act 2000 Say About Trustee Payment?

Part V of the Trustee Act 2000 addresses professional trustee remuneration in two principal ways. It explains how an express charging clause operates and may also allow certain professional trustees to receive payment where the trust document contains no such clause.

The Act does not give every trustee a general right to be paid. Lay trustees remain subject to the usual rule that they cannot receive remuneration unless the trust document, the court or another legally effective arrangement authorises it.

Section 28: express professional charging clauses

Section 28 applies where the trust document expressly allows a trust corporation or a trustee acting in a professional capacity to receive payment for services provided to the trust.

Subject to the wording of the trust document, a professional trustee may receive remuneration even where a lay trustee could have carried out the same work. A solicitor appointed as trustee may therefore be entitled to charge for administrative tasks as well as work requiring legal expertise.

A trustee relying on section 28 should confirm that:

• The trust document contains a charging provision
• The provision applies to them
• The work falls within its scope
• The proposed fees comply with any limits
• Nothing else in the trust document prevents payment

Section 28 helps interpret an existing charging clause. It does not create an unrestricted right to charge.

Section 29: payment without an express charging clause

Section 29 may apply where the trust document does not contain an express professional charging clause.

A trust corporation acting as trustee may generally receive reasonable remuneration for services provided to a private trust, subject to the terms of the trust document.

An individual professional trustee may also receive reasonable remuneration where:

• They provide services in the course of a profession or business
• They are not the sole trustee
• Every other trustee agrees in writing
• The trust is not charitable
• The trust document does not prevent payment

The requirement for written agreement is important. The other trustees should consider whether the work is necessary, whether the charges are reasonable and whether the arrangement supports the proper administration of the trust.

What is reasonable remuneration?

The Trustee Act 2000 defines reasonable remuneration by reference to what is reasonable in the circumstances for the services provided.

There is no fixed fee scale. Relevant factors may include the time spent, the complexity of the work, the skill required, the nature and value of the trust assets and whether someone with a lower charging rate could reasonably have carried out the task.

The High Court considered these issues in Pullan v Wilson and others [2014] EWHC 126 (Ch). The decision confirmed that a professional trustee’s usual hourly rate will not automatically be reasonable in every case. The appropriate fee depends on the work undertaken and the level of professional skill it genuinely required.

Section 31: reimbursement of expenses

Section 31 generally allows trustees to recover expenses properly incurred while acting on behalf of the trust.

This can apply to both lay and professional trustees. However, a trustee cannot claim payment for their time by describing it as an expense. Separate authority is required for remuneration.

The Trustee Act 2000 does not replace the trust document. Trustees should begin with the wording of the will or trust deed and then consider whether sections 28, 29 or 31 apply.

How Much Do Trustees Get Paid?

There is no standard rate of trustee remuneration. The amount will depend on the authority for payment, the services provided and what is reasonable in the circumstances.

Lay trustees do not usually receive payment for carrying out ordinary trustee duties. They can generally recover reasonable expenses, but they need separate authority before charging for their time.

Professional trustee fees may be calculated through:

• Hourly rates
• Fixed fees for specific work
• Periodic administration charges
• Fees linked to the value of the trust assets
• A combination of different charging methods

The trust document may specify how fees should be calculated. Where a professional trustee relies on section 29 of the Trustee Act 2000, the amount must represent reasonable remuneration for the services provided.

An authorised charging method does not automatically make every fee reasonable. Trustees should consider the work undertaken, the expertise required and whether the charges remain proportionate to the trust’s needs.

What did Pullan v Wilson say about trustee fees?

The High Court considered professional trustee remuneration in Pullan v Wilson and others [2014] EWHC 126 (Ch). The professional trustee claimed an hourly rate of £400 for his work and £200 for work undertaken by his assistants. The court found that the rates were excessive in the circumstances.

The decision established several practical principles.

A professional trustee should explain clearly and in writing how they and any assistants intend to charge before accepting the role. Where appropriate, they should provide this information to the other trustees and principal beneficiaries.

A professional trustee’s standard hourly rate will not necessarily be reasonable for every task. The fee should reflect the time involved and the level of expertise the work genuinely required. A senior professional’s usual rate may be excessive where a less experienced person could reasonably have completed the task.

Professional trustees should therefore provide clear information about:

• The services they will undertake
• Who will complete the work
• The rates that will apply
• Whether assistants or other advisers will be involved
• How and when fees will be reviewed

Agreeing the charging basis at the outset reduces the risk of later disputes and helps the trustees and beneficiaries assess whether payments remain reasonable.

What Duties Apply When Paying Trustees?

A trustee’s legal duties and responsibilities continue to apply when they receive remuneration. Authority to charge does not allow them to place their personal interests ahead of the trust or its beneficiaries.

Trustees must act in accordance with the trust document, use their powers for a proper purpose and maintain accurate accounts.

Avoiding unauthorised profits and conflicts of interest

A trustee cannot profit from their position unless the trust document, legislation, the court or another legally effective arrangement permits it. A trustee who takes payment without authority may have to repay the money, even where they completed useful work.

Payment also creates a potential conflict of interest for the trustee. The trustee receiving remuneration should not control the decision about whether their own fees are authorised or reasonable.

The other trustees should consider the arrangement independently and record:

• The authority for payment
• The work covered
• The charging method
• Why the amount is reasonable
• How they managed the conflict

Where section 29 applies to an individual professional trustee, every other trustee must agree to the payment in writing.

Keeping clear trust accounts

Trust accounts should distinguish between:

• Payment for acting as trustee
• Separate professional fees
• Reimbursement of expenses
• Payments to external advisers
• Costs connected with trust property or investments

Invoices and records should contain enough detail for the trustees and beneficiaries to understand what work was completed and why the trust paid for it.

Trustees should also review ongoing charging arrangements. A fee structure that was reasonable at the beginning of the administration may need to change if the amount or complexity of the work reduces.

What Can Beneficiaries Do If They Are Concerned About Trustee Fees?

Beneficiaries are entitled to a certain amount of information about how the trust is run. They can raise concerns where trustee fees appear unusually high, the basis for payment is unclear or the trust accounts provide limited information.

Professional trust administration can involve substantial work, so a high fee is not automatically improper. The first step is usually to establish:

• What the trust document says about remuneration
• Whether the trustee is acting professionally
• Whether the other trustees gave any required written agreement
• What work the trustee completed
• How the fees were calculated
• Whether the accounts separate remuneration from expenses

A beneficiary can ask the trustees to explain the basis of the fees and provide appropriate information. Depending on the circumstances, this may include the charging clause, written agreements, trust accounts, invoices or a summary of the work undertaken.

Trustees do not necessarily have to disclose every document requested. However, they should be able to account for their administration of the trust and explain payments made from the trust fund.

Challenging trustee remuneration

A beneficiary may have grounds to challenge payment where:

• The trust document does not authorise it
• The statutory requirements have not been met
• The trustee charged for work outside the charging clause
• The required written agreement was not obtained
• The trustee improperly approved their own fees
• The amount appears unreasonable
• Remuneration has been presented as an expense
• The trust accounts do not adequately explain the payment

The parties may resolve the issue by exchanging information, agreeing revised fees or arranging repayment of an unauthorised amount. Where this is not possible, the court can consider whether the trustee had authority to charge and whether the remuneration was reasonable.

A trustee may have to repay fees taken without authority or charges exceeding what the trust document permits.

Concerns about payment can also form part of a wider trustee dispute. Repeated unauthorised payments, poor accounts, unmanaged conflicts or a failure to provide information may support an application to remove a trustee where they affect the proper administration of the trust.

How JMW Helps With Trustee Payment Disputes

Our will disputes solicitors advise trustees, beneficiaries and other interested parties on disputes involving trustee remuneration, professional fees and expenses.

We review the trust document, the Trustee Act 2000 and the records relating to payment. This allows us to establish whether the trustee had authority to charge, whether the correct process was followed and whether the amount appears reasonable.

We advise on:

• Interpreting professional charging clauses
• Establishing a trustee’s right to remuneration
• Reviewing professional trustee fees
• Challenging unauthorised or excessive payments
• Requesting trust accounts and supporting information
• Responding to allegations of improper payment
• Seeking repayment to the trust
• Resolving conflicts between trustees and beneficiaries
• Trustee removal where fee concerns form part of a wider dispute

We take a focused and strategic approach. Clear correspondence and supporting evidence may resolve the issue without court proceedings. Where further action is required, we advise on the most effective route for protecting the trust and the interests of those involved.