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legalgems, Lawyer
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How much should a trustee charge for a $3,700,000.00 trust

Customer Question

How much should a trustee charge for a $3,700,000.00 trust in CA?
Submitted: 25 days ago.
Category: Legal
Expert:  legalgems replied 25 days ago.

Hello! I will be reviewing your question and posting a response momentarily; if you have any follow up questions please respond here. Thanks!

Expert:  legalgems replied 25 days ago.

Did the trust specify an amount?

Customer: replied 24 days ago.
Expert:  legalgems replied 24 days ago.

Thank you;

here are the relevant probate codes, with an explanation 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.

Per the court rules, the following factors are to be considered:

Rule 7.776. Compensation of trustees

In determining or approving compensation of a trustee, the court may consider, among other factors, the following:

(1)The gross income of the trust estate;

(2)The success or failure of the trustee's administration;

(3)Any unusual skill, expertise, or experience brought to the trustee's work;

(4)The fidelity or disloyalty shown by the trustee;

(5)The amount of risk and responsibility assumed by the trustee;

(6)The time spent in the performance of the trustee's duties;

(7)The custom in the community where the court is located regarding compensation authorized by settlors, compensation allowed by the court, or charges of corporate trustees for trusts of similar size and complexity; and

(8)Whether the work performed was routine, or required more than ordinary skill or judgment.

So, unlike executor fees, the code is silent, and only states the fee is to be reasonable. Usually that is an hourly fee of $20-35 an hour for a layman trustee, $250-300 for a professional trustee; or 1/2 to 1% of the value of the trust's assets(for standard estates) I am including the executor fees listed by statute but those are generally higher since it involves more court appearances.

It is quite common, under code 17200, for a trustee to petition the court for approval of fees to help prevent future challenges.

10800. (a) Subject to the provisions of this part, for ordinary
services the personal representative shall receive compensation based
on the value of the estate accounted for by the personal
representative, as follows:
(1) Four percent on the first one hundred thousand dollars
(2) Three percent on the next one hundred thousand dollars
(3) Two percent on the next eight hundred thousand dollars
(4) One percent on the next nine million dollars ($9,000,000).
(5) One-half of one percent on the next fifteen million dollars
(6) For all amounts above twenty-five million dollars
($25,000,000), a reasonable amount to be determined by the court.
(b) For the purposes of this section, the value of the estate
accounted for by the personal representative is the total amount of
the appraisal value of property in the inventory, plus gains over the
appraisal value on sales, plus receipts, less losses from the
appraisal value on sales, without reference to encumbrances or other
obligations on estate property.


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Expert:  legalgems replied 22 days ago.

Hello again; just checking in to see how things worked out;
if you have further questions please don't hesitate to reach out to me here on Just Answer.

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