What fees can a brokerage or trust company charge to transfer or close out accounts when we move the trust to a different trustee? – North Carolina

Short Answer

In North Carolina, a trustee (including a corporate trustee) can generally be paid only what the trust document allows, or—if the document is silent—what is reasonable under the circumstances. A brokerage or trust company may also seek reimbursement for reasonable administrative expenses tied to closing or transferring accounts, but “transfer-out” or “closeout” charges still need to fit within the trust’s terms and the trustee’s duty to act in good faith. If beneficiaries believe the fees are excessive, North Carolina law provides a way to ask the clerk of superior court to review the reasonableness of trustee compensation after notice.

Understanding the Problem

In North Carolina trust administration, the key question is whether a corporate trustee or brokerage acting in a trustee role can charge fees for the work of transferring trust assets and closing accounts when the family decides to move a testamentary trust to a different trustee. The decision point is whether the charges are permitted by the trust’s terms or, if the trust is silent, whether the charges are reasonable for the work required to transition the trust. This issue often comes up when a will-created trust must distribute some assets outright and continue holding other assets in separate sub-trusts, which can require multiple account transfers and new registrations.

Apply the Law

North Carolina generally treats trustee fees and trust administration expenses as fiduciary charges that must be authorized by the trust instrument or justified as reasonable. If the trust does not set compensation, the trustee is entitled to reasonable compensation based on factors like complexity, risk, asset type, time spent, and comparable charges for similar services. North Carolina also allows a process where qualified beneficiaries can receive notice of compensation and, within a short window, ask the clerk of superior court to review whether the compensation is reasonable.

Key Requirements

Authority in the trust document: The will/trust terms may set a fee schedule, allow “usual corporate trustee fees,” or limit what can be charged for termination, distribution, or transfers.
Reasonableness if terms are silent: If the document does not specify compensation, the trustee’s compensation should be reasonable under the circumstances, considering statutory factors such as complexity, time, risk, asset type, and comparable charges.
Proper notice and review rights: When compensation crosses certain thresholds and notice is given, qualified beneficiaries may have a limited time to seek review by the clerk of superior court.

What the Statutes Say

N.C. Gen. Stat. § 32-54 (Compensation of trustees) – If the trust does not specify compensation, the trustee is entitled to compensation that is reasonable under the circumstances and the statute lists factors used to evaluate reasonableness.
N.C. Gen. Stat. § 32-55 (Notice) – Allows notice to qualified beneficiaries about trustee compensation above a threshold and describes a 20-day period to seek review of reasonableness with the clerk of superior court.

Analysis

Apply the Rule to the Facts: Here, the trust administration involves (1) outright distributions of some shares and (2) continued administration of other shares in separate sub-trusts. That structure can increase the administrative work needed to “close out” old accounts and re-title assets into new trust/sub-trust accounts, which is relevant to reasonableness. Even so, the current corporate trustee’s charges should match what the will/trust authorizes and, if the document is silent, should align with reasonable trustee compensation and reasonable administrative expenses for the transition.

Process & Timing

Who initiates: The acting trustee (or the successor trustee once properly appointed) typically coordinates the transition. Where: The main oversight forum for trust disputes is usually the Clerk of Superior Court in the county with proper venue under North Carolina trust procedure. What: The practical starting point is a written request for (a) the current trustee’s fee schedule, (b) any “termination/transfer” charges, and (c) a final accounting or closing statement showing exactly what will be deducted and why.
Review the trust terms and the fee disclosures: Compare the proposed charges to the will/trust language on trustee compensation, administrative expenses, and distribution/termination costs. Also confirm whether the institution is charging as a trustee (fiduciary compensation) versus charging as a brokerage (account-level service fees), because the legal analysis can differ depending on the role and the governing agreements.
Address disputes promptly: If notice of compensation is provided under North Carolina law and the beneficiaries disagree with the amount, a proceeding may be filed to ask the clerk of superior court to review reasonableness within the statutory window stated in the notice.

Exceptions & Pitfalls

The trust document may control: Some testamentary trusts authorize “usual” corporate trustee fees or incorporate an institution’s published schedule. If so, the main fight becomes whether the trustee applied that schedule correctly and in good faith.
Multiple sub-trusts can multiply charges: When a will requires separate shares or sub-trusts, institutions sometimes apply minimum annual fees, termination fees, or account closing charges per sub-trust. That can be a surprise and should be evaluated for reasonableness and consistency with the governing document.
Confusing trustee fees with brokerage fees: A corporate trustee’s fiduciary compensation is analyzed under trustee-compensation rules, while a brokerage’s account fees may be governed by account agreements. When the same institution provides both services, itemization matters.
Missing the review window: If a statutory notice is given and the deadline passes, it can become harder to challenge the amount later. Acting quickly also helps preserve records needed to evaluate what work was actually performed.

Conclusion

In North Carolina, a corporate trustee’s charges to transfer assets or close out trust accounts generally must be authorized by the trust’s terms or, if the trust is silent, must be reasonable under the circumstances. Fees often increase when a testamentary trust requires both outright distributions and ongoing sub-trust administration, but the charges should still be supportable and properly itemized. The most practical next step is to request the proposed final fee/expense statement and, if a statutory compensation notice is given, file any challenge with the clerk of superior court within 20 days.

Talk to a Probate Attorney

If a family is weighing whether to keep a testamentary trust with the current corporate trustee or move it—and the proposed transfer or closeout fees seem unclear or high—our firm has experienced attorneys who can help review the trust terms, the fee schedule, and the timing for any objection. Call us today at [919-341-7055].

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.