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One of the biggest reasons my older clients set up living trusts is to save their children the cost of probate. So when the time comes, successor trustees naturally want to know what the trust administration and the house sale will actually cost, and whether they should be paid for their own time. Unlike probate, there's no fee schedule written into the law, which means the answer takes a little more explanation. This article lays out the typical costs in Santa Clara County, compares them to probate on a real number, and covers how trustee compensation works. It's part of my guide to selling a house in a trust after a death in Santa Clara County.

Key Takeaways

California has no statutory fee schedule for trust administration. Trustees are entitled to reasonable compensation unless the trust says otherwise, under Probate Code section 15681.

Trust attorneys typically bill hourly or on a flat fee. Some charge a percentage, so ask how they bill before you sign an engagement letter.

On a $1,800,000 house, probate's statutory executor and attorney fees would total $62,000. Trust administration usually costs a fraction of that.

The costs of the sale itself, including commission, escrow, title, and preparation, are about the same whether it's a trust sale or a probate sale.

Family trustees who are also beneficiaries often waive compensation because it's taxable income.

Summary: California has no set fee schedule for trust administration, so trustee and attorney costs usually come in far below probate's statutory fees. The costs of the sale itself, like commission, escrow, and preparation, are about the same either way.

Trustee Compensation

If the trust sets the trustee's compensation, that controls. Most family trusts either say nothing or allow "reasonable compensation." What is reasonable depends on the work involved, the size of the trust, the trustee's skill, and the results. A professional fiduciary typically bills by the hour, and corporate trustees often charge an annual percentage of the assets they manage. Family members serving as trustee commonly either waive compensation or keep a simple time log and pay themselves a modest hourly rate that the other beneficiaries agree to in advance. The tax angle matters. Trustee compensation is taxable income to the trustee, while an inheritance generally isn't taxed as income. If you're one of three equal beneficiaries, paying yourself a fee mostly moves money from your siblings to you and then to the IRS. It can still be fair, especially when one sibling does nearly all the work, but decide it openly and in writing.

Attorney Fees

Trust administration attorneys in Santa Clara County usually bill in one of three ways: hourly, a flat fee for a defined scope of work, or occasionally a percentage of the trust's value. For a straightforward trust with one house and some financial accounts, I most often see families pay on an hourly or flat-fee basis, and the total is typically well below what probate would cost. When an attorney proposes a percentage fee, compare it with what hourly billing would likely total, because a percentage on a $2 million trust can add up quickly for work that may not be complicated.

A Side-by-Side on a $1,800,000 House

Here is how the administration costs compare when a $1,800,000 house is the main asset. The trust column is a general range, since fees vary by attorney and complexity.

Cost	Trust administration	Probate
Executor or trustee compensation	Reasonable compensation, often waived by family trustees	$31,000 statutory, unless waived
Attorney fees	Hourly or flat fee, commonly a fraction of the probate amount for a simple trust	$31,000 statutory, plus possible extraordinary fees for the sale
Court filing and publication	None, unless a petition is needed	Several hundred dollars or more
Valuation	A private appraisal, usually several hundred to about a thousand dollars	Probate referee fee of one tenth of one percent, about $1,800
Bond	Usually none	Annual premium unless waived
Time before the house can close	Often 2 to 4 months after death	Often 5 to 9 months after filing

The time difference is a cost too. A vacant Silicon Valley house can cost $2,000 to $5,000 a month to carry in property taxes, insurance, utilities, and upkeep, so several extra months in probate adds thousands more. My article on probate fees on a Silicon Valley home walks through the probate side in detail.

Costs of the Sale Itself

Once the house is on the market, the costs look the same as any other sale.

• Real estate commission, negotiated in the listing agreement, with any contribution to the buyer's agent now negotiated separately in writing.
• Santa Clara County transfer tax of $1.10 per $1,000 of the price, and some cities add their own, including San Jose's Measure E tax on sales of $2 million and up.
• Escrow and title fees, which vary by price and company.
• Preparation, which can range from a cleanout and paint to more. See selling as-is or fixing it up, which applies equally to trust sales.
• Carrying costs until closing.

Other Trust Costs to Budget For

• A CPA to prepare the trust's fiduciary income tax returns, federal Form 1041 and California Form 541, for the year of the sale.
• Recording fees for the Affidavit of Death of Trustee.
• Estate sale or cleanout costs, which are sometimes partly offset by the estate sale proceeds. See Bay Area estate sales.
• A professional fiduciary, if the family decides a neutral trustee is needed.

How to Keep Costs Reasonable

• Ask the attorney how they bill, and get the scope in writing.
• Handle the straightforward tasks yourself, like gathering documents and securing the house.
• Decide trustee compensation openly with the other beneficiaries at the start.
• Avoid expensive renovations and sell promptly to limit carrying costs.
• Keep everything in the trust bank account so the accounting is simple and inexpensive.

For the full sale process, go back to my guide to selling a house in a trust after a death in Santa Clara County.

Sources and Further Reading

• California Probate Code § 15681 (trustee compensation)
• California Probate Code § 16061.7 (trustee notification)
• IRS Publication 559, Survivors, Executors, and Administrators

Frequently Asked Questions

How much does a successor trustee get paid in California?

California has no fixed schedule. Trustees are entitled to reasonable compensation unless the trust says otherwise. Many family trustees waive it or agree on a modest hourly rate with the other beneficiaries.

Is trust administration cheaper than probate?

Usually yes. On a $1,800,000 house, probate's statutory executor and attorney fees would be $62,000, while trust administration attorneys typically bill hourly or a flat fee that's often much less.

Can a trust attorney charge a percentage fee?

Some do, but it's not required by law. Ask how the attorney bills and compare a percentage fee with the likely hourly total.

Are the costs of selling a house the same in a trust and in probate?

The sale costs, such as commission, transfer tax, escrow, and title, are about the same. The difference is in administration fees and how long the house must be carried.

Is trustee compensation taxable?

Yes. Trustee compensation is taxable income to the trustee, while an inheritance generally isn't taxed as income, which is why many family trustees waive it.

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