california law library

I am often amused by the ads and offers I see concerning living trusts.

Almost always, one of the big sales pitches is how a living trust save th * doll * usands of RS in "bad" "probate fees.

This leads consumers to believe that you have for us, but living trusts are "FR * E." (that is, after you have paid the promoter in order for you).

Not so.

Here is an email I received from one of my subscribers (they gave me permission to discuss the question in this article):

Hi Phil, My mother died recently and my sister is 1 Trustee. She claims she is 10% of my Mom's estate as 1st Trustee. Is this true? What is the normal fee for the 1st Trustee?

Good question. Often one of the largest, if not the biggest areas of dispute between the children or heirs after a death occurs.

What is a trustee fee? How is it calculated? Are there additional fees?

If you have a trust and do not know the answer to these questions, I think the right idea "" Uh-ohh! ""

OK, let's have a quick review of the trustee fees.

Let us first draw a distinction between the times a trustee may be asked to act.

Remember that one of the best uses of a trust is to manage the assets of someone who is unfit. My best friend and his sister have been managing their mother Affairs (as trustee) for the last 10 years. Mom is 95, in decent physical health, but has Alzheimer's).

Let's save the discussion on trustee fees for the management of an incompetent's estate for a future article. Let us to answer the above question.

Here it is again:

Hi Phil, My mother died recently and my sister is 1 Trustee. She claims she is 10% of my Mom's estate as 1st Trustee. Is this true? What is the normal fee for the 1st Trustee?

Basically, the question arises, "How much can a fiduciary responsibility to a state after death?" "

How can we answer this question?

First, we need the trust instrument.

Most of the instruments competently trust have a section that deals with trustee fees.

The better are relatively specific, and a distinction between acting as a trustee, while the recipient is alive, but incapacitated, and as a trustee after a death has occurred (similar actions to what an executor performs through a probate).

So, first we take a look at the trust instrument. It is often a fee. Sometimes they say, 75% to 1.25% of total assets managed and transferred (since it is the typical fee of the professional trust company by many banks).

In fact, let's see, what tells us the California law on trustee fees (every state has a statute, go to your county law library and ask a librarian, the law, so you see it).

In California, the law of life is familiar in the Probate Code. Here is what Probate Code Sections 15680-82 tells us:

15,680. (a) Subject to subdivision (b) if the trust instrument provides that the compensation of the trustee, the trustee is entitled, in accordance with the trust instrument.

(b) to a proper, the court may fix, or the more or less as compensation may be granted under the terms of trust in one of the following circumstances:

(1) If the duties of the trustee are substantially different from those contemplated when the trust was created.

(2) Where the compensation in accordance with the provisions of the trust would be inequitable or unreasonably high or low.

(3) In extraordinary circumstances calling for equitable relief.

(c) An order fixing or the greater or lesser compensation under subdivision (b) applies only prospectively to actions in the administration of the trust after the order is made.

15,681. If the trust instrument does not specify the compensation of the trustee, the trustee is entitled to reasonable compensation under the circumstances.

So, to answer the question, we must find out what the trust instrument says. If he remains silent, then tells us section 15681 of the compensation to "reasonable compensation under the circumstances. "

What is appropriate under the circumstances to be appropriate? When it comes to me, I would collect the brochures of the various bank trust departments in the region, in order to their prices. Where I live, is the fee, 75% to 1.20%, depending on the size of the trust and the nature of the assets. The minimum value is $ 5,000.

So it looks like the answer to the question is that if the trust instrument, says the 1st Trustee is entitled to 10% of compensation, then they may be. However, if it is not the amount of costs must be reasonable.

And, even if the trust instrument said 10%, I would seriously consider a court order to per-capita-15680 (b) (2) that allows the court to change compensation "" Is the compensation in accordance with the provisions of the trust would be inequitable or unreasonably low or high. ""

This article needs to be continued, because we have not even touched on the major Ney m * m * ker for trustees and lawyers "," extraordinary costs "."

Good luck and until next time,

Phil Craig

P.S. Feel free to those with friends.

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Phil Craig is a licensed attorney and entrepreneur. He began practicing law at the completion of the 25th Birthday in 1979. He is not on more clients, but is a consultant for some of the biggest names in the Internet world. He shares his insights in the last 25 years in his life Trust Secrets newsletter site: click here =========> http://www.LivingTrustSecrets.com

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