CALL US: (925) 660-7544
Request a free consultation

Trustee Fees in California

October 19, 2012

In most cases, a trustee does not need to obtain a court order before paying himself — he simply pays himself for the work performed. Although some trusts state the amount of the trustee’s fee, most trust instruments provide that a trustee is entitled to “reasonable compensation.” What, then, is reasonable? While there are no strict rules, some Bay Area courts provide “guidelines.” For example, in Contra Costa County, the court’s guidelines allow a $40 per hour fee for non-professional trustees. San Francisco County, on the other hand, considers nine “applicable criteria” in determining fees, as explained in the case of Estate of Nazro, 15 Cal.App.3d 218 (1971).

In some cases what is “reasonable” is determined by an unscrupulous trustee. One Bay Area attorney is known to include a ten percent trustee fee in some of his trusts. Another trustee bought himself a new pickup truck, fully loaded, and claimed it was his trustee’s fee.

Even if the trustee’s fee is plainly reasonable, it is sometimes prudent to seek court approval when the trustee has had a contentious relationship with the beneficiaries. The court’s order approving the compensation usually includes a finding that the fee was authorized and proper for the services performed. Once the beneficiaries have been notified of the order and the time to appeal expires, the fees are no longer open to challenge by the beneficiaries. One important exception is that any details concerning compensation and services that are not disclosed in the fee petition remain subject to challenge by the beneficiaries.

Related Stories

November 14, 2017

Online Estate Planning Programs

For many young parents this scenario is familiar: You and your spouse are flying across...
August 22, 2017

Arbitrations v. Class Actions

The Consumer Financial Protection Bureau recently finalized a controversial rule that prohibits financial-service companies from...
June 12, 2017

The Limited Effectiveness of “No Contest” Clauses in California Trust & Estate Litigation

A “no contest clause,” according to California Probate Code section 21310(c), is “a provision in...