This compensation schedule is tricky to figure out, so it's helpful to have a trusts and estates attorney calculate it for you. Many states only require "reasonable compensation" without explaining what that is.
However, if you want to use a trust company or some other type of corporation, they may not want to administer the trust without a minimum payment guarantee. Fair and reasonable compensation to a trustee takes several factors into account if the amount isn't itemized in the trust agreement.
Additionally, just because you name a family member to administer the trust doesn't mean you don't have to pay them. They can bring a court case for compensation if there's no payment arrangement.
Whoever you choose as trustee or successor trustee , they're going to require payment for their services, even if they're family.
In many cases, unlike the structured fee in New York, a reasonable amount is 0. The trustee receives the fee annually and should not defer taking it or a court may find that they've waived it. While professional trust companies often charge more than other trustees, compensation is usually between 0.
It's better to pay the trustee a flat rate rather than an hourly rate in most cases, but this is usually decided on a case-by-case basis. Still, if the trustee believes the compensation isn't sufficient, they can bring a case in court to request additional compensation. It all depends on the facts of the case, the terms of the Trust, and the amount of work required of the professional Trustee. By earned, we mean that all fees must be paid after the Trustee properly, and reasonably, manages the Trust administration.
If a Trustee does not work, then the Trustee will receive no pay no matter what the circumstances. Albertson Keith A. Davidson Jeffrey M. Search Website. In some states, the information on this website may be considered a lawyer referral service. Please reference the Terms of Use and the Supplemental Terms for specific information related to your state.
Lawyer Directory. Call us at 1 Payment for Serving as Trustee. Being a trustee can involve a lot of work, so compensation is usually part of the deal. Learn how and how much trustees get paid. Start Your Will Today! Calculating a Reasonable Fee The trustee's payment comes from the trust assets.
If it's left to you to come up with a "reasonable" fee, here are a couple of ways you might go about the task: 1. So basically the duties of the Trustee include, but not limited to, the following: Create a checking account of the trust. All income and expenses should go through this account to keep a faithful bookkeeping practice. Remember, you have a fiduciary duty to the beneficiaries. You will want to keep them abreast of the changes at least annually, but if they ask for information in a reasonable amount of time.
Know the state laws Do not mix your expenses with the expenses of the trust. Mixing can cause a breach of contract and can adversely affect the amount you get paid. Do keep in regular contact with the beneficiaries to understand their needs. Do file annual income tax returns for the trust. Get professional advice.
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