Trustee Pay, Costs, and the Bond Default
Serving as a custodial trustee takes time, attention, and sometimes out-of-pocket spending. This statute sets three rules about trustee pay and costs. A trust document, beneficiary agreement, or court order can change these defaults.
Except as otherwise provided in the instrument creating the custodial trust, in an agreement with the beneficiary or by court order, a custodial trustee: 1. Is entitled to reimbursement from custodial trust property for reasonable expenses incurred in the performance of fiduciary services. 2. Has a noncumulative election, to be made not later than six months after the end of each calendar year, to charge a reasonable compensation for fiduciary services performed during that year. 3. Need not furnish a bond or other security for the faithful performance of fiduciary duties.
A.R.S. § 14-9114What This Means in Practice
First, the trustee can recover reasonable costs from the trust assets. For example, these include filing fees, accounting costs, or travel tied to trust management. Family members who serve as trustee often focus on these out-of-pocket costs first.
Second, the trustee may choose to take fair pay for their services each year. This choice is noncumulative, so the trustee cannot skip a year and then claim double the next year. The trustee must make this choice within six months after the calendar year ends.
There is no fixed hourly rate or fee set by the statute. What counts as "reasonable" depends on the trust's complexity and the work involved. A corporate trustee usually has published fee schedules. A family member may charge less or nothing at all.
Third, the trustee does not need to post a bond. A bond is a financial guarantee that protects beneficiaries if the trustee mishandles trust assets. A court, the trust document, or the beneficiary can override this default and require one.
Families should discuss trustee pay before naming someone to the role. Clear expectations about fees and costs can prevent disagreements later.