How Is Compensation Determined for the Trustee of an Irrevocable Trust in Georgia?

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Georgia Statute 53-12-210 determines the compensation of the trustee of an irrevocable trust. Georgia is one of a few states that is very specific as to how both individual and corporate trustees receive compensation for trustee services.

No Fee Agreement

While a trust grantor is alive and competent, determination of trustee compensation can occur through the trust agreement or any separate fee agreement between the trust grantor and the trustee. If there is no fee agreement in place when the trust becomes irrevocable, the trust beneficiaries can enter into a fee agreement with the trustee without court order. This occurs if all adult beneficiaries consent to the fee and any minor beneficiaries consent through a guardian or conservator.

Existing Fee Agreement

Once a trust becomes irrevocable, Georgia law provides that modification of any fee arrangement in place can occur without court order. The process is the same as establishing a new fee agreement, as all adult beneficiaries consent to the fee and any minor beneficiaries consent through a guardian or conservator. If all beneficiaries do not agree or minors do not have proper legal representation, the issue goes to court for clarification.

Corporate Trustee

If irrevocable trust beneficiaries do not negotiate a fee agreement and the trust has a corporate trustee, then Georgia law states that the trustee compensation is in accordance with the corporate trustee’s standard published fee schedule. The law does state that the published fee schedule of a corporate trustee must be reasonable for the circumstances.

Individual Trustee

For individual trustees without a negotiated fee agreement, Georgia law provides a compensation scale. Individual irrevocable trustees receive compensation based on the market value of the trust, which is 1.75 percent for the first $500,000; 1.25 percent for the next $500,000; 1 percent for the next $1 million; 0.85 percent for the next $3 million; and 0.5 percent for all values over $5 million. For example, a $1 million irrevocable trust calculates compensation at $17,500 for the first $500,000 plus $12,500 for the next $500,000, to create total annual compensation of $30,000.

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