Getting paid as a North Carolina trustee

The terms first

Where the trust's terms specify the trustee's compensation, the trustee is compensated as they specify (N.C. Gen. Stat. § 36C-7-708(b)). Terms granting the amount "provided by law" or similar are read as granting reasonable compensation, and terms saying the trustee serves without compensation are read as exactly that (N.C. Gen. Stat. § 32-60).

Reasonable compensation

Where the terms are silent, the trustee is entitled to compensation reasonable under the circumstances (N.C. Gen. Stat. §§ 36C-7-708(a), 32-54(a)), weighed by eleven factors: the difficulty and novelty of the tasks; the responsibilities and risks; the amount and character of the assets; the trustee's skill, experience, expertise and facilities; the quality of the performance; comparable charges; the time devoted; the time constraints; the nature and costs of delegated services; with several trustees, the total of all fees; and other relevant factors (N.C. Gen. Stat. § 32-54(b)).

Paying yourself: the four-tenths line and the notice

N.C. Gen. Stat. § 32-56 allows payment without the clerk of superior court's prior approval only if the year's compensation does not exceed four-tenths of one percent of the principal value of the trust assets on the last day of the trust accounting year, or after written notice to all qualified beneficiaries under N.C. Gen. Stat. § 32-55 and 20 days without a proceeding for review. The notice states the 20 days, and may give the periodic amount or the method instead of each payment (N.C. Gen. Stat. § 32-55).

Review and reimbursement

The trustee or any qualified beneficiary may ask the clerk to review the reasonableness of compensation or an expense reimbursement — a beneficiary even after the 20 days — and the clerk may order refunds (N.C. Gen. Stat. § 32-57). Expenses properly incurred are reimbursed from the trust without the clerk's prior approval, with a lien to secure them (N.C. Gen. Stat. § 32-58).

The statutes, verbatim

• Compensation of trustees

  N.C. Gen. Stat. § 32-54 ↗

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

• Notice of proposed compensation

  N.C. Gen. Stat. § 32-55 ↗

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

• Payment of compensation without court order

  N.C. Gen. Stat. § 32-56 ↗

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

• Judicial review of compensation; payment with court order

  N.C. Gen. Stat. § 32-57 ↗

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

Common questions

Frequently asked questions

How much can a North Carolina trustee charge?

What the terms specify; otherwise compensation reasonable under the circumstances by the eleven factors of N.C. Gen. Stat. § 32-54. The statute sets no percentage fee; the four-tenths of one percent figure is the line below which the trustee may pay itself without the clerk's prior approval (N.C. Gen. Stat. § 32-56).

What notice does a North Carolina trustee give before a larger fee?

Written notice to all qualified beneficiaries of the proposed payment, or of the periodic amount or method, stating that they have 20 days to ask the clerk of superior court to review its reasonableness (N.C. Gen. Stat. § 32-55).

Can a beneficiary challenge a North Carolina trustee's fee later?

Yes — a qualified beneficiary may begin a proceeding for review even after the 20-day period, and the clerk may order the trustee to refund excessive compensation (N.C. Gen. Stat. § 32-57).

General information about North Carolina law, not legal advice.