If the trust document is silent on the matter of trustee compensation, then California law directs that said compensation must be \u201creasonable.” (Probate Code Section 15681.) Often, a trust simply states that the trustee is entitled to \u201creasonable compensation\u201d without any definition or any guidelines\u00a0to help determine the amount of trustee compensation. In those cases, California law provides for the following guidelines to consider when determining or approving trustee compensation (California Rule of Court 7.776):<\/p>\n\n\n\n
Applying these legal guidelines to each case requires\napplication of the facts and circumstances of each case, as well as case law\nand the practices of the local courts.\nThis can be difficult to do. Opinions can vary as to what is \u201creasonable\u201d under\nthis law. Strategy is often involved in asserting\nor opposing trustee compensation claims.<\/p>\n\n\n\n
In contrast, a living trust can be drafted to specify the amount of trustee compensation and define the amount in different ways, such as by allowing compensation at a set hourly rate or, as was the case under prior law, by allowing compensation based on a percentage of the trust for each year of service (for example: 1% annually or 1% of the first $1M and a smaller percentage above $1M).<\/p>\n\n\n\n
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If the trust document is silent on the matter of trustee compensation, then California law directs that said compensation must be \u201creasonable.” (Probate Code Section 15681.) Often, a trust simply states that the trustee is entitled to \u201creasonable compensation\u201d without any definition or any guidelines\u00a0to help determine the amount of trustee compensation. In those cases, … Continue reading Trustee Compensation<\/span>