QUESTION
When can a trustee's compensation be successfully opposed?
Asked on Nov 29th, 2013 on Estate Planning - California
More details to this question:
My sister is the successor trustee of our parent’s family trust in California. She recently petitioned the court to approve her actions and accounting. Additionally she requested $45,000 as trustee compensation for three years she has been trustee. My sister has always stated that she was not charging the trust for her work as trustee. She would often bring up this “fact” to help her get her way in disagreements with beneficiaries. In her three years as trustee, her quarter-annual accounting statements have never shown that she was accepting trustee compensation. Additionally her first accounting with the court showed that she lost over $60,000 by waiting too long to sell a declining real property. I told my attorney I wanted to object to her trustee compensation for those reasons. He said her quarter-annual statements didn’t show her compensation only because she hadn’t received it yet. He said trustees are entitled to be paid, it’s common for them to request back-pay, and that “we would look petty and foolish to oppose it”. He refused to file an opposition to the trustee’s compensation. I know that, in general, every trustee is entitled to compensation. But I don’t think every trustee is granted compensation regardless of the poor job they do. Doesn’t her losing $60,000 give me a right to complain about her compensation and let the court decide if she deserves it? Was my attorney wrong?
4 ANSWERS
Taxation Law Attorney serving Glendale, CA
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Irsfeld, Irsfeld & Younger LLP
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From what you've written, I can't tell if $45K is reasonable. In all likelihood, you could get the compensation reduced or a surcharge levied (same effect). Whether it is economically or socially wise to pursue this is another matter. You might spend $10K in order to save $5K.
Answered on Jan 29th, 2014 at 2:04 AM
Edwin K. Niles
The fee seems high; is this a large trust? The fee is based on the work done, but if she made a costly error that can be taken into account. But did she actually make a mistake? No-one can see the future of the market; it?s only with hindsight that we can make that claim.
Answered on Dec 03rd, 2013 at 4:48 PM
Trusts Attorney serving Sacramento, CA
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Law Office of Victor Waid
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Suggest you seek an independent review by a probate/trust litigation attorney to review the first attorney's advice to you. However, you are advised to file an objection with the court to her claim immediately, if you believe she has overcharged the trust or fails to account for her time and charge a reasonable sum for her services to the trust, before it is to late to file the objection, if you believe the sister claim is illegitimate. DONOTDELAY. You are entitled to an accounting for the trust assets and of sister services to the trust.
Answered on Dec 03rd, 2013 at 4:47 PM
2 Awards
You need to get advise from another attorney but you need to provide more information. What is the value of the estate? Were the quarter accountings put before the court? What does the $45,000 represent? (Must be a really big estate). The simple loss of $60,000 in the real estate market is not enough to keep her from getting compensation, but the question is, is the compensation reasonable and warranted in the trust. At James Law Group we make every effort to respond to you quickly and efficiently. This means we may be responding to you from a mobile device. As you know, responding on these devices can result in typographical errors that my otherwise not occur. In order to provide this extra service, please be aware of this and excuse any errors that may be caused by responding in this forum. The content of this message is protected by attorney-client privilege.
Answered on Dec 03rd, 2013 at 4:46 PM