One percent (1%) of the fair market value of assets per annum is what
I have discovered as reasonable compensation for a trustee fee in
California. Please read on.
First, basic info on trustee compensation in California:
"If the trust instrument provides for the trustee's compensation, the
trustee is entitled to be compensated in accordance with the trust
instrument. The court may fix or allow greater or lesser compensation
than could be allowed under the terms of the trust in certain
circumstances. Cal. Prob. Code § 15680 (West 2000). If the trust
instrument does not specify the trustee's compensation, the trustee is
entitled to reasonable compensation under the circumstances. Cal.
Prob. Code § 15681 (West 2000)."
Read the California Probate Code § 15681
Second, a suggested percentage from two sources:
"Trustees are entitled to reasonable compensation for the services
performed for the trust. Often the trust document will specify an
amount or a limitation. If it does not, a Trustee is entitled to
compensation in the same manner as would anyone else performing
similar management or investment services. This usually depends upon
the time involved, the responsibilities undertaken, the results
achieved and the magnitude of the problems encountered. ***A good rule
of thumb, generally used by corporate trustees in California in
estimating Trustees' fees, is one percent of the principal balance of
the trust per annum."***
Also, see section 14.110, page 206, "Compensation Guidelines for
Management of the Estate," a San Francisco Superior Court document at
http://sfgov.org/site/uploadedfiles/courts/rule_14.pdf where it reads,
"Ordinarily, annual fees for guardians, conservators and trustee shall
not exceed the following: One percent (1%) of the fair market value of
assets at the end of the accounting period."
One percent seems reasonable and an accepted standard in lieu of a stated fee.
And finally, just in case you're also the Executor, some helpful tax info:
"The Executor is entitled to reasonable compensation, often limited to
a certain percentage (e.g., 5%) of the property in the probate estate.
(Extra compensation, related to handling some special matter, may be
allowed by the court.) That does not mean the Executor automatically
gets that much....F.Y.I. Common Question: "I've recently been
appointed as Executor, and also a beneficiary under Grampa?s Will. Am
I better off, tax-wise, taking my fee or not?" The answer will vary,
but the factors to consider are as follows:
"From the beneficiary's standpoint, inheritance money is free from
federal income tax. (The federal levy - if any - is an estate tax,
taken "off the top" before the beneficiary gets his/her share.) The
fee to an Executor, however, is ordinary, taxable income to him. These
facts weigh in favor of the beneficiary/Executor not taking his fee,
and obtaining a slightly larger (income tax free) inheritance. So if
the only beneficiaries are you and your spouse, for example, then it
makes sense to skip the fee, for this reason."
I am not an attorney and I do not present this answer as legal advice
- it's simply my research results quoting what appears to be a fair
and established estate trustee fee perentage. To be 100% certain, I
would ask an attorney if this 1% is an accepted fee (and the CA court
legal record appears to already back that up). Of course, I believe
you may choose less if you desire - from this laywoman's standpoint,
less shouldn't be a problem.
Should you require any clarification, please request it and I will be
happy to respond further.
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