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I am a trustee for my mom's trust, she is incapacitated. She owns six rental properties that I manage and pay all of her bills.

Westminster, CA |

The trust states I am able to be paid to administer the trust. I have been administering the trust for a year and a half without receiving any money. How do you base being paid for administering the trust? Is it a percentage of monthly income? What would the percentage be if that is how it is determined? If that isn't how it is determined, what would a reasonable monthly payment be?.........Thank you, Bob

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Attorney answers 5

Posted

This is not the answer you want, but I strongly urge you to contact an experienced estate planning attorney in your mother's state of residence. Due to self-dealing rules, it is vitally important that you determine the reasonableness of any fee you take, as well as whether you need to get the approval of a court or, at a bare minimum, the remaindermen of the trust (the beneficiaries of the trust after your mother passes away) before making any payment thereof. Good luck to you.

This information is presented as a public service. It should not be construed to be formal legal advice nor considered to be the formation of a lawyer/client relationship.

Posted

I agree with Attorney Pankowski. You are entitled to "reasonable" compensation. What is reasonable is usually developed through caselaw, at least in the State where I practice. Whether a percentage is reasonable or not is up to the judge, if someone complains. If no one complains about what you charge, you will probably be fine. This is the kind of subject, however, that illustrates the need for the assistance of an attorney. The attorney could have guided you on this issue, from the start. Given the possibility for personal liability if you do anything wrong, I do not know why you would want to take any risks.

James Frederick

***Please be sure to mark if you find the answer "helpful" or a "best" answer. Thank you! I hope this helps. ***************************************** LEGAL DISCLAIMER I am licensed to practice law in the State of Michigan and have offices in Wayne and Ingham Counties. My practice is focused in the areas of estate planning and probate administration. I am ethically required to state that the above answer does not create an attorney/client relationship. These responses should be considered general legal education and are intended to provide general information about the question asked. Frequently, the question does not include important facts that, if known, could significantly change the answer. Information provided on this site should not be used as a substitute for competent legal advice from a licensed attorney that practices in your state. The law changes frequently and varies from state to state. If I refer to your state's laws, you should not rely on what I say; I just did a quick Internet search and found something that looked relevant that I hoped you would find helpful. You should verify and confirm any information provided with an attorney licensed in your state. I hope you our answer helpful!

Posted

Good Answers above. However, you do not necessarily need court approval. The best course of action would be to just disclose the compensation you intend to tak and get approval of the other beneficiaries etc. Even though you are not required to account to anyone except the current income beneficiary (which sounds like your mother), I would also recommend providing accountings to the other beneficiaries to establish trust and avoid any complaints later.
Managing real estate is time consumming and you are entitled to be paid. If you were not doing it and it was a professional fiduciary instead, they would charge a significant fee. Banks will typically charge a percentage fee depending on the assets and total value. You could talk to a bank and a professional fiduciary and ask them to quote you a fee if they were to manage and use that for refernce. Somewhere between one-half and one-percent of the assets being managed would seem appropriate. Remember there's also risk to you as trustee so that is another reason you should be fairly compensated. I agree with the others that you should consult local attorney for more specific recommendations. Good Luck

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Posted

Typically, in California, the trustee receives an annual fee based on a percentage of the value of the Trust Estate, excluding the home. Institutional Trustees, like banks and trust companies, and professional private fiduciaries usually charge 1 to 1.5 % annually. Typically, an additional fee (for example $2500) can be charged for the house. However, if it is an elder case, the fees could go as high as 2% per year. Non-professional family member trustees can usually charge 1/2 percent because they also need to hire attorneys, CPA's and other professionals to accomplish the same work. Of course, if the beneficiaries object, you will need to justify your fees.

DISCLAIMER: This answer gives partial details for discussion purposes only. It is not intended to be a complete analysis of your legal issue, nor does it create an attorney-client relationship. If you have any questions, you should seek the advice of an attorney in your city or local area.

Posted

For a discussion of trustee fees, see the California Probate Code Sections 15680-15688.

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