Main Menu
Kentucky testamentary trustee fee statute repealed

In the recent legislative session, the Kentucky Legislature repealed a statute that regulated compensation for trustees of trusts under Wills. This statute, KRS § 386.180, previously provided that trustees of trusts under a Will were entitled to an annual commission of up to 6% of the income from the trust, plus 0.3% of the value of the trust principal. In lieu of the annual principal fee, the fiduciary had the option of taking a commission not to exceed 6% of the fair value of the principal distribution at the time of termination of the trust. In addition, a trustee was entitled to additional compensation for the performance of unusual or extraordinary services in his or her care and management of the trust. 


However, this limitation only applied to trusts created under a Will. It did not apply to an inter vivos trust, even if the trust was created simultaneously with a Will. This distinction between the two types of trusts has been removed with the repeal of this statute, and annual trustee compensation from a trust under a Will is no longer capped at 6% of the income per year from the trust and at 0.3% of principal. 

Essentially, what this repeal means is that a trustee of a trust under a Will may now receive compensation based on a trustee’s fee schedule, thereby eliminating the trustee fee differences between trusts under Wills and inter vivos trusts. If you are the beneficiary of a trust under a Will, this may ultimately mean your trust will now pay different trustee fees than before. Check with your trustee to see how this change will affect you.

  • Partner

    John is Chair of the firm's Estate Planning Department. He also leads the firm's Senior Partner Committee, and is a member of the firm's Finance Committee. John, a former Certified Public Accountant, began his career in the tax ...

RSS RSS Feed

Subscribe

Recent Posts

Categories

Contributors

Archives

Back to Page