by John Darer® CLU ChFC MSSC CeFT RSP CLTC
Are you familiar with comparing the fees associated with a settlement preservation trust, settlement planning trusts, recovery management, or special needs trusts? Here settlement planner John Darer reviews and assists in analyzing the fees and charges that may be directly or indirectly incurred by trust beneficiaries.
Yes, "How Much is That Trustee in the Window"? Start humming those words to the familiar childhood tune while you're reading…
What are some of the Benefits of Settlement Trusts?
There is no question that where they make sense and , if necessary, have been court approved, settlement trusts add value to the settlement planning process.
- Settlement trusts can provide spendthrift protection
- Settelment trusts can provide liquidity
- Settlement trust can provide flexibility
- Settlement trusts are an alternate means to create periodic payments when constructive receipt has occurred and,
- If used in conjunction with a structured settlement, a settlement trust may act as a receptacle to receive periodic payments on behalf of the trust beneficiary to protect them from from hangers-on.
Trustee fees fall into these three general categories:
1.Account Level Trustee Fees
Cost associated with the trustee discharging his/her/ its fiduciary duties. What is being advertised in published fee schedule and reflected on account statements in transaction activity. These are fees that you can figuratively see, smell and touch. Is there a minimum annual fee?
2. Investment Costs (note: could be one , all or some)
Costs inherent in the investment choices made with the trust assets, whether through common trust funds, mutual funds or money managers assigned to a specific asset class.
A. Outside advisory fees
Cost associated with hiring outside advisors and experts ( is it out of trustee's pocket or out of client's pocket)
B. underlying investment vehicles loads, investment charges, within the vehicle and netted out of performance…not on account level.
Note: account level investment charge would show up on statements
C. account level fee charged by trustee or investment advisor
3. Additional Miscellaneous charges
- Fee to prepare tax return
- Special asset charges
- Check charges
- Front end load just to set up trust (have seen them range from 2%-4%) One vendor refers to this charge as a "funding fee"
- Fees to manage real estate
Last updated August 8, 2025
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