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Richard
Richard, Attorney
Category: Business Law
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Experience:  32 years of experience practicing law and a businessman.
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my brother who is mentally handicapped has a trust that has

Customer Question

my brother who is mentally handicapped has a trust that has been set up by my parents who have both passed away years ago. Can I set up a separate trust to go along with his exiisting trust so that he will have 2 trusts to protect his assets
Submitted: 1 year ago.
Category: Business Law
Expert:  Richard replied 1 year ago.
Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.

Good morning. Just so I can be sure I have the facts correct....are you asking whether you can establish your own trust for the benefit of your brother and fund it with assets? Thanks.
Customer: replied 1 year ago.

yes...

Customer: replied 1 year ago.

yes

Expert:  Richard replied 1 year ago.
Thanks for following up. Yes, you absolutely can set up an additional trust for the benefit of your brother. It will not negatively impact him at all and it will protect anything you give him from his creditors as long as you set it up as a spendthrift trust. A spendthrift trust is a trust with a special provision that protects the assets from attachment of a creditor of a beneficiary. A spendthrift provision is a provision in a living trust to limit the ability of a specific beneficiary to anticipate (act ahead of actually receiving an inheritance) by borrowing against a future inheritance or assigning it.



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Customer: replied 1 year ago.

can the administrator of the trust be compensated for his or her work in dealing day to day with the trust.

Expert:  Richard replied 1 year ago.
Thanks for following up. Yes, this is specifically addressed in the California Trust Code. I have provided the applicable statutory provisions for you below....

"15680. (a) Subject to subdivision (b), and except as provided in
Section 15688, if the trust instrument provides for the trustee's
compensation, the trustee is entitled to be compensated in accordance
with the trust instrument.
(b) Upon proper showing, the court may fix or allow greater or
lesser compensation than could be allowed under the terms of the
trust in any of the following circumstances:
(1) Where the duties of the trustee are substantially different
from those contemplated when the trust was created.
(2) Where the compensation in accordance with the terms of the
trust would be inequitable or unreasonably low or high.
(3) In extraordinary circumstances calling for equitable relief.
(c) An order fixing or allowing greater or lesser compensation
under subdivision (b) applies only prospectively to actions taken in
administration of the trust after the order is made.



15681. If the trust instrument does not specify the trustee's
compensation, the trustee is entitled to reasonable compensation
under the circumstances.


15682. The court may fix an amount of periodic compensation under
Sections 15680 and 15681 to continue for as long as the court
determines is proper.


15683. Unless the trust instrument otherwise provides or the
trustees otherwise agree, if the trust has two or more trustees, the
compensation shall be apportioned among the cotrustees according to
the services rendered by them.


15684. A trustee is entitled to the repayment out of the trust
property for the following:
(a) Expenditures that were properly incurred in the administration
of the trust.
(b) To the extent that they benefited the trust, expenditures that
were not properly incurred in the administration of the trust.



15685. The trustee has an equitable lien on the trust property as
against the beneficiary in the amount of advances, with any interest,
made for the protection of the trust, and for expenses, losses, and
liabilities sustained in the administration of the trust or because
of ownership or control of any trust property.




15686. (a) As used in this section, "trustee's fee" includes, but
is not limited to, the trustee's periodic base fee, rate of
percentage compensation, minimum fee, hourly rate, and transaction
charge, but does not include fees for extraordinary services.
(b) A trustee may not charge an increased trustee's fee for
administration of a particular trust unless the trustee first gives
at least 60 days' written notice of that increased fee to all of the
following persons:
(1) Each beneficiary who is entitled to an account under Section
16062.
(2) Each beneficiary who was given the last preceding account.
(3) Each beneficiary who has made a written request to the trustee
for notice of an increased trustee's fee and has given an address
for receiving notice by mail.
(c) If a beneficiary files a petition under Section 17200 for
review of the increased trustee's fee or for removal of the trustee
and serves a copy of the petition on the trustee before the
expiration of the 60-day period, the increased trustee's fee does not
take effect as to that trust until otherwise ordered by the court or
the petition is dismissed.



15687. (a) Notwithstanding any provision of a trust to the
contrary, a trustee who is an attorney may receive only (1) the
trustee's compensation provided in the trust or otherwise provided in
this article or (2) compensation for legal services performed for
the trustee, unless the trustee obtains approval for the right to
dual compensation as provided in subdivision (d).
(b) No parent, child, sibling, or spouse of a person who is a
trustee, and no law partnership or corporation whose partner,
shareholder, or employee is serving as a trustee shall receive any
compensation for legal services performed for the trustee unless the
trustee waives trustee compensation or unless the trustee obtains
approval for the right to dual compensation as provided in
subdivision (d).
(c) This section shall not apply if the trustee is related by
blood or marriage to, or is a cohabitant with, the settlor.
(d) After full disclosure of the nature of the compensation and
relationship of the trustee to all persons receiving compensation
under this section, the trustee may obtain approval for dual
compensation by either of the following:
(1) An order pursuant to paragraph (21) of subdivision (b) of
Section 17200.
(2) Giving 30 days' advance written notice to the persons entitled
to notice under Section 17203. Within that 30-day period, any person
entitled to notice may object to the proposed action by written
notice to the trustee or by filing a petition pursuant to paragraph
(21) of subdivision (b) of Section 17200. If the trustee receives
this objection during that 30-day period and if the trustee wishes
dual compensation, the trustee shall file a petition for approval
pursuant to paragraph (21) of subdivision (b) of Section 17200.
(e) Any waiver of the requirements of this section is against
public policy and shall be void.
(f) This section applies to services rendered on or after January
1, 1994.



15688. Notwithstanding any other provision of this article and the
terms of the trust, a public guardian or public administrator who is
appointed as a trustee of a trust pursuant to Section 15660.5 shall
be paid from the trust property for all of the following:
(a) Reasonable expenses incurred in the administration of the
trust.
(b) Compensation for services of the public guardian or public
administrator and the attorney of the public guardian or public
administrator, as follows:
(1) If the public guardian or public administrator is appointed as
trustee of a trust that provides for the outright distribution of
the entire trust estate, compensation for the public guardian or
public administrator, and any attorney for the public guardian or
public administrator, shall be calculated as that provided to a
personal representative and attorney pursuant to Part 7 (commencing
with Section 10800) of Division 7, based on the fair market value of
the assets as of the date of the appointment, provided that the
minimum amount of compensation for the public guardian or the public
administrator shall be one thousand dollars ($1,000). Additionally,
the minimum amount of compensation for the attorney for the public
guardian or the public administrator, if any, shall be one thousand
dollars ($1,000).
(2) For a trust other than that described in paragraph (1), the
public guardian or public administrator shall be compensated as
provided in Section 15680. Compensation shall be consistent with
compensation allowed for professional fiduciaries or corporate
fiduciaries providing comparable services.
(3) Except as provided in paragraph (1), reasonable compensation
for the attorney for the public guardian or public administrator.
(c) An annual bond fee in the amount of twenty-five dollars ($25)
plus one-fourth of 1 percent of the amount of the trust assets
greater than ten thousand dollars ($10,000). The amount charged shall
be deposited in the county treasury."

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