Trustee fees questions: answers before you sign

Trustee fees questions usually come down to one worry: will I understand what I am paying for, and will it stay predictable? This page collects the questions we hear most often from settlors, beneficiaries and advisers, with short answers. Fees depend on the structure, the assets and the work involved, so no figure appears here; they are set out in writing after a confidential assessment.

How trustee fees are built

What fee models exist?

Most professional trustees combine a few building blocks: a recurring administration charge, time-based charges for work outside the routine, and a separate treatment of costs paid to third parties. Some add a charge linked to the value of the assets, others prefer a fixed annual amount for a defined scope. For a side-by-side view, see trustee fee models side by side.

Why do trustees charge fees at all?

A trustee carries real duties and real liability. Under the Swiss framework, a professional trustee is a regulated financial institution that manages the separate assets and keeps their value in line with the trust's purpose. Staff, qualified management, audit and supervision all sit behind that service.

How are trustees paid in practice?

Usually from the trust assets, in line with the trust deed and the engagement letter, and invoiced at agreed intervals. Our guide to how trustees are paid walks through each model with examples.

Is a fixed fee better than a time-based one?

Neither is better in the abstract. A fixed arrangement gives predictability but only for the scope it describes; time-based charging fits unusual or contentious work. Many structures use both: fixed for routine administration, time-based for projects.

Does a larger structure always cost more?

Not automatically, but complexity does. More entities, more bank accounts, more beneficiaries in different countries and unusual assets such as property or a family business all add work. The charge follows the work, not the label on the structure.

The engagement letter

What is an engagement letter?

It is the written agreement between the trustee and the trust (and often the settlor) that sets out the services, how they are charged, who pays and how either side can end the relationship. It sits alongside the trust deed and does not replace it.

What should the engagement letter say about fees?

At minimum: what the recurring charge covers, how and when it is invoiced, how extras are identified and approved, how third-party costs are passed on, and how and when the terms can be reviewed.

Can fees change during the life of the trust?

They can, if the engagement letter allows it. Look for the review mechanism: notice given in advance, a reason for the change and a right to object or to move to another trustee. A clause that lets charges change at will without notice is worth questioning.

Who signs the engagement letter?

Usually the trustee and the settlor, sometimes with the protector acknowledging it. Where a trust already exists and the trustee changes, the incoming trustee often signs with the retiring trustee and the other parties named in the deed of retirement and appointment.

What if the engagement letter and the trust deed disagree?

The trust deed governs the trust itself, so a conflict is a signal to fix the documents rather than live with the inconsistency. Ask your adviser or the trustee to reconcile them in writing.

Who pays and what counts as extra

Who pays the fee: the trust or the settlor?

Most often the trust pays from its own assets, because the service benefits the trust. Some settlors pay personally, for instance while the trust is still unfunded or when they prefer to keep trust assets untouched. The engagement letter should say which applies, and whether it can change.

Can beneficiaries be asked to pay?

Only if the trust deed or the agreement provides for it. Beneficiaries normally bear fees indirectly, because charges reduce the assets available. If you are a beneficiary, you can ask what has been charged; see what information your trustee must give you.

What counts as an extra?

Typically anything outside the defined routine scope: a change of trustee, a restructuring, a sale of a major asset, a dispute, an unusual request from a tax authority or a bank, or extended work for a beneficiary's special circumstances. The engagement letter should list examples and say how you are told before the work starts.

Is a yearly review an extra?

It depends on how the agreement is written. Many trustees include a yearly compliance review in the recurring service; others charge separately. See the yearly compliance review by your trustee for what it normally covers.

Are meetings with the family charged separately?

Often a set number of routine contacts is part of the service, with additional meetings treated as extras. Ask how this is defined, particularly if you expect regular family meetings and succession planning sessions.

Third-party costs and other charges

How are third-party costs treated?

Costs of outside providers, such as lawyers, auditors, valuers, registry or filing charges, are normally passed on at cost or with a stated handling approach. The engagement letter should say which approach applies and whether larger items need your approval first.

Who chooses outside advisers?

The trustee remains responsible for the decision, but it is reasonable to ask for a say, or at least advance notice, for significant instructions. A trustee who uses the same adviser for everything should be able to explain why.

Are bank charges part of the trustee's fee?

No. Custody, account and transaction charges are set by the bank and are normally debited to the trust accounts. How the accounts are run is covered in your trustee and the trust bank accounts.

Does the supervisory framework affect what I pay?

Indirectly. A Swiss trustee is authorised by FINMA and supervised on a day-to-day basis by a supervisory organisation, with an annual audit by an audit firm. These requirements are part of the cost of running a regulated business, and they are also part of what you are buying. Check the approval itself with FINMA and SO-FIT: what the approval means for you.

Negotiating and comparing

Can I negotiate?

Yes, within reason. Scope is often more negotiable than the headline charge: what is included, how extras are approved, how third-party costs are passed on and how the terms are reviewed. Be wary of an offer that is low for the routine service but silent on extras.

How do I compare two trustees' offers?

Put the same scenario in front of both: the same structure, the same assets and the same expected events over a year. Then compare what is included, what is extra and how each side can end the arrangement. Our trustee due diligence questionnaire helps you ask the same questions of each candidate.

Is the cheapest trustee a warning sign?

Not necessarily, but a very low routine charge deserves a closer look at what is left out. The more useful test is whether the service described matches the duties the trustee must meet.

What should I ask before signing?

Ask what the recurring charge covers, what is treated as an extra and how you are told, how third-party costs are handled, how and when terms can change, who pays, and what happens to fees if you later change trustee. Keep the answers in writing.