Depending on your priorities, you may pass an inheritance to your family with a will, a trust, or perhaps both. If you use a will, you should name someone to be your executor. If you create a trust, you will need to appoint a trustee. In both cases, you should consider how each individual will receive payment for their services.
Given that administering an estate or a trust can involve many hours of work, it is natural that an executor or a trustee should receive compensation. Even if you wish to appoint a close relative like an adult child, the subject of pay will probably still come up if you approach your child about becoming a trustee or an executor.
Pay for executors
According to Smart Asset, executors draw their compensation from the estates they administer, so you must consider that some of the money in your estate will go to paying your executor. A probate court might rule that your executor should receive a certain amount from your estate. However, if you do not want a judge making that determination, you may describe how to pay your executor in your will.
Pay for trustees
A trustee generally receives compensation from the assets of the trust. You may establish how to pay your trustee through the terms of the trust. If your trust is simple to carry out, your trustee may not need much in terms of pay. Trustees who oversee complex trusts generally take larger compensation.
Given that many trusts avoid probate, a trustee usually cannot go to a probate court to secure compensation if the trust terms do not establish payment. However, without compensation, your trustee candidate might be reluctant to take on the job or mishandle the trust due to a lack of motivation. Discussing questions of pay with your prospective executor or trustee may be necessary to help you realize your estate plans.