Can A Pet Trustee Receive Payment?
I saw your recent explanation of the duties of a Trustee for a Pet Trust. I have been asked by my brother Rex to serve as the trustee for his three dogs, Bingo, Bango and Bongo (very cute eh!) If I agree to do this, can I get paid for my time?
Zachary Palm Island, Florida
Zachary, unless the Trust Instrument has some type of specific prohibition, you are entitled to "reasonable compensation" for your services as a Trustee.
What is reasonable compensation?
That is a good question and is usually based upon an hourly rate or a percentage fee of the total amount of the Trust.
Bank trust departments will customarily charge an annual fee equal to approximately one percent (1%) of the current value of the trust's assets. They may charge a lower fee, but then add on transaction charges for every action.
If the Trust Instrument provides for specific compensation, you should follow the dictates of that document. If you feel that the compensation provided for in the trust is unreasonable or unduly burdensome, you can either resign as the Trustee or petition the court for additional compensation.
The trustee’s fee is normally paid on a quarterly basis. Remember, compensation (but not expense reimbursements) that you receive as a Trustee, is taxable to you, usually as self employment income.
Some Trustees want to waive the compensation because of their love for the family or animals involved. If you want to do this, make sure that you consult with your accountant about how to document this compensation in the correct manner. Otherwise you may have taxable income imputed to you even though you do not actually receive it.
The duties and responsibilities of a Pet Trustee are serious and legally binding. Receiving reasonable compensation for the performance of this role is fair and anticipated.
