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New Jersey Trustee compensation: N.J.S.A. 3B:18-2, explained

New Jersey gives Trustees a statutory commission schedule. If the Trust specifies compensation, the Trustee is compensated as specified (N.J.S.A. 3B:18-2; a trustee under a will may renounce a specific provision to take the statutory commissions, N.J.S.A. 3B:18-3); if it is silent, chapter 18 of Title 3B provides the commissions — 6% of income received (N.J.S.A. 3B:18-24), an annual corpus commission of $5 per thousand on the first $400,000 and $3 per thousand above it, at least $100 a year (N.J.S.A. 3B:18-25), and a commission on corpus distributed at the termination or on a distribution (N.J.S.A. 3B:18-28), each reviewable by the court on an accounting. Here is how New Jersey approaches the number — and why paying yourself is a decision to paper carefully.

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How New Jersey approaches the number

  • Trust terms first. If the instrument specifies compensation, the Trustee is entitled to what it says — though a court may allow more or less if the duties turn out substantially different from those contemplated, or the specified amount is unreasonably low or high.
  • If the Trust is silent: compensation reasonable under the circumstances. There is no statutory percentage for New Jersey Trustees — courts weigh things like the size of the Trust, the work actually performed, the skill required, and customary charges.
  • Professional help is separate: expenses properly incurred in the administration are reimbursed from the Trust property, in addition to the commissions (N.J.S.A. 3B:31-53); an attorney who serves as trustee and performs professional services is allowed a counsel fee in addition to commissions (N.J.S.A. 3B:18-6); a trustee under a will furnishes a statement of the corpus commissions taken within 60 days after the end of each tax year (N.J.S.A. 3B:18-7); and the report you may provide states the source and amount of your compensation (N.J.S.A. 3B:31-67(c)). Among the remedies for a breach of trust, the court may reduce or deny compensation (N.J.S.A. 3B:31-71); family Trustees commonly charge less than the schedule or waive — choices, not requirements.
  • Don't confuse it with the attorney's fee. The Trustee's own compensation is governed by N.J.S.A. 3B:18-2 and the commissions of chapter 18 of Title 3B; the attorney the Trustee hires is paid the fee they agree, subject to the court's allowance on the account — New Jersey sets no presumptive attorney fee for trust administration.

The governing provisions

  • Commissions of nontestamentary trustee

    N.J.S.A. 3B:18-2 ↗

    Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

  • Duty of loyalty

    N.J.S.A. 3B:31-55 ↗

    Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

  • Discretionary powers

    N.J.S.A. 3B:31-68 ↗

    Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

Why paying yourself needs care

  • Paying yourself is a self-interested act by a fiduciary — the duty of loyalty (N.J.S.A. 3B:31-55) is in the room. Document the basis, the rate, the time, and the work before the money moves.
  • If you are also a beneficiary, the line between compensation and distribution matters: N.J.S.A. 3B:31-68 limits self-dealing discretion, and compensation that looks like a disguised distribution invites challenge.
  • Beneficiaries will see it: compensation appears in the Trust accounting (N.J.S.A. 3B:31-67(c)). A number that surprises them there is how disputes start.
  • TrusteeClear treats paying yourself as a gated action — the record is assembled before the payment, and a firm-supervised matter routes it to the attorney first.

General information about New Jersey law, not legal advice.

Frequently asked questions

How is a New Jersey trustee paid?
As the trust instrument provides; absent an express provision, by the statutory commissions (N.J.S.A. 3B:18-2): income commissions of 6% of income received (N.J.S.A. 3B:18-24); annual corpus commissions of $5 per thousand on the first $400,000 of corpus value and $3 per thousand above, with a $100 minimum (N.J.S.A. 3B:18-25); one fifth more for each additional fiduciary (N.J.S.A. 3B:18-25.1); and, on termination or distribution, a commission on the corpus distributed of 2%, 1.5% or 1% by the years it was held (N.J.S.A. 3B:18-28). A trustee under a will takes no more than the statute's rates unless the will acknowledges them and expressly authorizes more (N.J.S.A. 3B:18-31). Expenses properly incurred are reimbursed in addition (N.J.S.A. 3B:31-53).
Can a court change a New Jersey trustee's commissions?
The commissions are reviewed on the accountings (N.J.S.A. 3B:18-27); on application the court reviews the annual corpus commissions, allowing no less than the statutory amounts (N.J.S.A. 3B:18-25); the court may allow additional commissions for unusual or extraordinary services (N.J.S.A. 3B:18-29); and among the remedies for a breach of trust the court may reduce or deny compensation (N.J.S.A. 3B:31-71). A fiduciary who is removed may forfeit commissions (N.J.S.A. 3B:18-5).
What about a trust the court supervises?
A trustee settles an account in the Superior Court at the intervals the court may require, and may settle a first account within a year of appointment or as soon as practicable (N.J.S.A. 3B:17-3); the account states how the corpus commissions were computed (R. 4:87-3). A trustee under a will furnishes, within sixty days after the end of each tax year, a statement of the corpus commissions taken and the basis of their computation to the income beneficiaries and to others who demand it (N.J.S.A. 3B:18-7), and gives bond only where the statute or the court requires one (N.J.S.A. 3B:31-47; N.J.S.A. 3B:15-1).

General information about New Jersey law, not legal advice.