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What Is the Trust Administration Fee Schedule in Florida?

Trusts can help people protect their assets, minimize taxes, avoid probate, maintain privacy, and reduce conflict among beneficiaries upon their passing. However, they often come with administration costs. This post discusses trust administration fee schedules in Florida.  

What Are Trusts?

Trusts are legal documents that detail the transfer of assets. Unlike wills, which only deal with the distribution of money and property after death, trusts can apply before or after death.

Trusts typically involve three parties:

  • Grantor: Also called a settlor, the grantor is the person who creates and funds the trust.
  • Beneficiary: Trusts hold assets on behalf of beneficiaries — the people or organizations receiving the money or property.
  • Trustee: The trustee is the individual or institution tasked with managing the trust and distributing funds according to the grantor’s wishes. 

What Kind of Trusts Are There?

There are many types of trusts with different purposes, including the following:

  • Living trusts — Trusts a grantor establishes during their lifetime
  • Testamentary trusts — Trusts created by a will after the grantor’s death
  • Charitable trusts — Trusts that distribute funds for the benefit of specific charitable purposes
  • Special needs trusts — Trusts that provide financial support to loved ones with special needs without jeopardizing their government benefits
  • Spendthrift trusts — Trusts that distribute funds to beneficiaries without giving them control of the assets

What Are Trust Administration Fees?

Trust administration fees are the compensation trustees receive for managing the trust. Trustees have the following responsibilities:

  • Distributing trust assets according to the trust instructions 
  • Taking care of taxes and accounting
  • Managing trust investments, including monitoring the market and rebalancing the portfolio

The trust document may specify who must pay what fees. In most cases, the administration costs come from the trust’s assets. However, trustees who fail to act in the beneficiary’s best interest may be responsible for paying the fees. 

Who Determines Trustee Compensation in Florida?

According to the Florida Trust Code, trustees are entitled to compensation that is “reasonable under the circumstances.” The grantor may establish a trust administration fee schedule in the trust instrument or by a separate agreement with the trustee. In the absence of either, Florida courts can determine the trustee’s compensation.

Even if a trust specifies trustee fees, the circuit court may allow more or less compensation in certain situations. For example, if the compensation is unreasonably high or low or the trustee’s duties differ substantially from when the grantor created the trust, the court may adjust the fees. 

What Are Typical Trust Administration Fee Schedules in Florida?

Several factors go into determining reasonable trust administration fees, including the following.

  • Trust size: The fee varies with the value of the assets the trustee receives and distributes. Average trustee fees in Florida range from 1% to 3% of the trust’s assets.
  • Trust complexity: Trustees who must spend more time managing a trust may merit higher fees. Complex trusts like special needs trusts may justify higher compensation, as might any extraordinary circumstances or work beyond the trustee’s typical duties. 
  • Trustee type: Large corporations may charge higher trust administration fees than local attorneys, family members, or friends. 
  • Trustee performance: A court may decide that a fee is reasonable for a loyal trustee who successfully administers the trust but unreasonable for a disloyal trustee who mismanages the trust.
  • Location: The cost of living and local community customs may dictate higher or lower fees for trustee services rendered.

Call Us for Help With Trust Administration in Florida

At Levy & Associates, we can assist with all your tax needs, from clarifying trust administration fee schedules to providing Florida tax relief services. We are available to answer your tax planning and tax resolution questions 24/7. Contact us online or call 800-TAX-LEVY for more information.

Contact Levy & Associates for Dependable Tax Audit Services

Levy & Associates is available for free initial consultations. We’re happy to answer any questions you have about the audit process or address any concerns about your specific situation.

There’s never a good time to be audited, and the time-consuming process will take away from your business or family if you try to face it alone. Let us handle and coordinate communication, so you can return to your daily life.