How Much Does a Trustee Get Paid in Massachusetts?

Trustee compensation is taxable income. In Massachusetts, trustees pay federal income tax, Massachusetts state income tax (up to 9.0%), and self-employment tax (15.3%). The trust can deduct the payment as an administrative expense.

Family members serving as trustees in Massachusetts are entitled to the same compensation as professional trustees. Many family trustees choose to waive or reduce their fee, especially if they are also beneficiaries. Detailed records of time and duties support the reasonableness of any fee taken.

One-time fees apply when a trust distributes all assets and closes, similar to executor work (typically 1-3% of trust value). Annual fees apply when the trust continues for years, such as trusts for minor children or special needs beneficiaries (typically 0.5-2% of assets per year). The compensation model depends on the trust's purpose, not Massachusetts law. Use the executor fee calculator to compare executor compensation for one-time distributions.

Executor fees and trustee compensation serve different roles. Executors handle a one-time probate process (typically 6-18 months), while trustees may manage assets for years or decades. In Massachusetts, executor fees may be set by statute, while trustee compensation is usually determined by the trust document or reasonable compensation standards. See the Massachusetts executor fee calculator for a detailed breakdown.

Trustee records typically cover time spent on trust duties: investment management, tax filings, beneficiary communications, bill payments, and distributions. Documentation of the trust's complexity and any special skills the trustee brings demonstrates that compensation is reasonable if beneficiaries or courts raise questions.