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Can a trustee collect statutory fees on homestead house or…

Customer Question
Can a trustee collect...

Can a trustee collect statutory fees on homestead house or assets in an irrevocable trust in Florida?

Lawyer's Assistant: What documents or supporting evidence do you have?

My sisters are trustees of my dads estate and they each paid themselves 3% of my dads estate including the homestead property under an irrevocable trust.

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

No,please I need an answer quickly.

Submitted: 4 months ago.Category: Estate Law
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12/2/2017
Estate Lawyer: Infolawyer, Attorney replied 4 months ago
Infolawyer
Infolawyer, Attorney
Category: Estate Law
Satisfied Customers: 60,961
Experience: Licensed attorney helping individuals and businesses.
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Unless by terms of trust or agreement trustee waived the fee, the trustee is entitled to the fee on all assets in the trust.Tried to expedite. Please let me know if the reply is acceptable by responding “yes” or “acceptable”
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Customer reply replied 4 months ago
I was told they can only collect on all property owned in ones name and when its under an irrevocable trust you give up that right and its no longer in the grantors own name the moment he dies but in the trust's
Estate Lawyer: Infolawyer, Attorney replied 4 months ago
The trustee collects on assets in a trust.
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Estate Lawyer: Infolawyer, Attorney replied 4 months ago
If not in the trust the trustee has no claim to it.
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Customer reply replied 4 months ago
Are you an attorney familiar with irrevocable trusts?
Estate Lawyer: Infolawyer, Attorney replied 4 months ago
I am. if I can elaborate on anything, just ask me. Please let me know if the reply is acceptable by responding “yes” or “acceptable”
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Customer reply replied 4 months ago
Your answer confuses me because in Florida trustees and attornies are able to collect fees on compensible value of the estate and assets in irrevocable trust are not compensible assets.
Estate Lawyer: Infolawyer, Attorney replied 4 months ago
If they are trustees of such trust as opposed to another trust those assets are included
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Estate Lawyer: Infolawyer, Attorney replied 4 months ago
My answer is clear but you seem to not agree.
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Estate Lawyer: Infolawyer, Attorney replied 4 months ago
if I can elaborate on anything, just ask me. Please let me know if the reply is acceptable by responding “yes” or “acceptable”
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Customer reply replied 4 months ago
I go back to the information that states they can collect on assets in ones own name, but in an irrevocable trust I understand that the trust requires you to relinquish that right so assets are no longer considered in ones own name.According to Irrevocable trust information by Cushing&Dolan it clearly states that "Assets owned in this irrevocable trust are not considered in ones own name thus are not includible in probate estate.And fees,accordingto 2017 Florida Statutes ,states that the commission for trustees or personal representatives are based on compensible value of he estate or the inventory value of probated assets and the way I understand this is that assets in irrevocable trust are not probable assets.How should I understand this?
Customer reply replied 4 months ago
It states that "because the assets in the trust no longer belong to you,you cannot count them among your estate",so why should they be entitled to collect on assets that don't belong to the estate anymore?This took effect the minute the grantor died.Are you still there to answer my questions?
Estate Lawyer: Infolawyer, Attorney replied 4 months ago
The trustee is managing the trust and is entitled to a fee on that trust unless trust or parties agree otherwise.
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Customer reply replied 4 months ago
Read information by Clark/Skatoff Florida Probate Lawyers and then get back with me on the correct answer,because that's what were dealing here.I'm sorry for being persistent with this but everywhere I have read tells me that statutory fees should not be collected on homestead property especially one in an irrevocable trust.I just needed confirmation of this.
Estate Lawyer: Infolawyer, Attorney replied 4 months ago
I will opt out and perhaps you get the answer you want to hear
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Estate Lawyer: Barrister, Attorney replied 4 months ago
Barrister
Barrister, Attorney
Category: Estate Law
Satisfied Customers: 41,139
Experience: 17 yrs estate law, real estate. Wills/Trusts/Probate
Verified

Hello, different expert here..

.

There may be some confusion based on the terms that are being used here as they are not interchangeable.

.

An Executor or Administrator manages an estate of a deceased person... either with a will or without one.... They are entitled to a fee based on the value of assets in the deceased's name at the time of death that go into their estate.

.

A trustee, in contrast, manages a trust, and is entitled to reasonable compensation based on the assets in the trust. The assets that are in the trust are not in the probate estate so an executor/Admin wouldn't get paid based on those assets, only assets in the actual probate estate.

.

So a trustee doesn't handle an estate... they handle a trust. An executor/Admin handles an estate..

,

With that said, if you are asking if an executor/Admin can collect a fee based on assets in an irrevocable trust, the answer is no....only the trustee is paid based on trust assets..

.

.

thanks

Barrister

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Customer reply replied 4 months ago
Please explain why an attorney or personal representative which can be both (executor or trustee) are advised not to take a statutory percentage fee based on homestead value property according to Probate Lawyers Clark/Skatoff. Probate Attorney's in Florida.This is what I'm questioning,whether they should of taken a fee from the homestead property which also is in an irrevocable trust.It mentioned that neither attorney nor personal rep which can mean the trustee/executor.according to information I read.I understand that different states have different rules.Are you giving me information according to Florida state law?Please, I am not putting into question your credentials , I just want to make sure the information you gave me applies for Florida too.I understand that a trustee can receive a fee for revocable trust assets but from what I gathered from the information on irrevocable trusts, this is not so, because assets in the irrevocable trust are no longer considered in ones own name .At the time of death the grantor relinquishes this right and he homestead is no longer considered property in his name and is not subject to fee collection by either attorney or personal rep (Executor or Trustee) and statutory fees of trustees or personal reps are based on assets in ones own name only.
Estate Lawyer: Barrister, Attorney replied 4 months ago

You aren't getting it... and are continuing to commingle terms that don't go together.... Personal Rep (PR), Executor, Administrator... all are the exact same thing except an Admin is just when there is no will. So they are essentially interchangeable terms...

.

A trustee is for a trust... period. An Executor or Personal Rep or Administrator (if no will) is for an estate...period. This is universal across the US... FL included.

.

If the home was in a trust, revocable or irrevocable... it is not legally owned by the "grantor" (i.e. the one who made the trust) it is owned by the trust. A trust is a legal entity that can own property and assets. The deed would have been transferred from the grantor to the trust.

,

If the grantor later died, the house is not in their probate estate because it is owned by the trust by being deeded over to it while the grantor was alive..

.

So an Executor/PR/Admin can't take a percentage of the house legally since the estate doesn't own it, the trust does. Only the trustee could claim some type of compensation based on the value of the assets in the trust..

.

Please explain why an attorney or personal representative which can be both (executor or trustee) are advised not to take a statutory percentage fee based on homestead value property according to Probate Lawyers Clark/Skatoff. Probate Attorney's in Florida

.

An attorney always wants to be paid a percentage of assets...whether it is a homesteaded property or not.. A personal rep (i.e. executor or Admin) might not want to take a percentage if they are the heir because that percentage would be income to them and they have to pay income taxes on it. If they were the only heir, the property comes to them tax free and they would avoid any income taxes by not claiming any compensation (i.e. income) from the estate.

.

But if the PR/Executor/Admin (all the same thing...just different terms) isn't an heir, there is no reason not to take a percentage as compensation for their work in settling the estate.

.

This is what I'm questioning,whether they should of taken a fee from the homestead property which also is in an irrevocable trust.It mentioned that neither attorney nor personal rep which can mean the trustee/executor.according to information

.

No, only the trustee can take a fee based on trust property. A PR/Executor/Admin can't.

.

I understand that different states have different rules.Are you giving me information according to Florida state law?

.

Correct. and yes these are universal rules. It is like a situation with a stop sign... it means stop in every single state in the US.. These PR/Exec/Admin rules apply universally although the amounts may vary under state law.

,

I understand that a trustee can receive a fee for revocable trust assets but from what I gathered from the information on irrevocable trusts, this is not so, because assets in the irrevocable trust are no longer considered in ones own name

.

Incorrect. A trustee is entitled to compensation regardless of whether it is revocable or irrevocable. Irrevocable trustees don't work for free..

.

At the time of death the grantor relinquishes this right and he homestead is no longer considered property in his name and is not subject to fee collection by either attorney or personal rep (Executor or Trustee) and statutory fees of trustees or personal reps are based on assets in ones own name only.

.

The grantor (i.e. maker) gave up their rights of ownership in an irrevocable trust the instant they deeded the property out of their name and into the trust and the trust became the owner. So no, it isn't in their probate estate any longer and is not subject to Executor fees, but is subject to Trustee fees (again..trustees don't work for free)

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Customer reply replied 4 months ago
Clark/Skatoff state,"If property is homestead property under Florida,it passes outside the probate estate.As nonprobate property,the property is a non probate asset in the hands of a personal representative,and the personal representative should not be seeking statutory percentage fees based on the value of the property.The same rule applies to the probate attorney seeking attorney fees-the value of homestead property should not be included in the fee request if based on the percentage of the value of the probate estate.These rules are a trap for the unwary one.Below is a memorandom that we filed in a case where the personal representative was trying to collect based on the value of homestead property and the attempt was unsuccessful.It goes on to say that "Because the Property was never an asset of the probate estate the personal representative and personal attorney are prohibited from using the value of the homestead in determining his statutory percentage fees because the statutory percentage fee is based on the compensable value of the estate.So again, can my sisters who are trustees(Personal Reps) of my fathers estate use the homestead property(home) which is in an irrevocable Trust not a regular trust nor Revocable but Irrovocable Trust to calculate their percentage fees?Please clarify if I am not understanding this correctly.
Estate Lawyer: Barrister, Attorney replied 4 months ago

Ok, one more time...

.

If property is homestead property under Florida,it passes outside the probate estate.As nonprobate property,the property is a non probate asset in the hands of a personal representative,and the personal representative should not be seeking statutory percentage fees based on the value of the property. The same rule applies to the probate attorney seeking attorney fees-the value of homestead property should not be included in the fee request if based on the percentage of the value of the probate estate

.

Correct.. I have no problems with this... But.. you said it is in an irrevocable trust.. So it is NOT in the hands of the Personal Rep... It is NOT in the probate estate at all... It is in the trust and under the trustee's control...

.

And since it is in the trust, it is subject to the trustee taking a fee for managing the trust assets.

.

So again, can my sisters who are trustees(Personal Reps) NOT the same thing... you can't interchange those terms.. They mean completely different things as one deals with a trust and one with an estate..

.

So if your sisters are Trustees of an Irrevocable trust, they can claim compensation based on the assets in the trust, normally including any real estate in the trust.

.

HOWEVER, if this was the deceased's homestead, there is a Florida appellate decision which held that a residence can retain homestead protection in an irrevocable trust. In this case, a husband’s living trust allocated the a homestead to an irrevocable trust for the benefit of a surviving spouse. The court found that the property retained homestead exemption from creditor’s forced sale and levy despite the fact that it was titled in the name of what is an irrevocable trust. Aronson v. Aronson, 2010 W.L.(###) ###-####/em>.

.

SO, considering that a homestead is not subject to PR fees in a probate estate, I would opine that based on the above case, a homestead in an irrevocable trust would still retain its homestead status and it too should be excluded from the Trustee taking a fee based on its value..

.

Bot***** *****ne is you can contest them taking any fee on the homestead property and file an objection with the probate court and have a judge make a ruling on whether it was allowed or not..

.

I hope that is clearer..

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