What is reasonable compensation for the Trustee?

The court may consider the following factors in determining reasonable compensation (see Cal Rules of Ct 7.776):

  • The gross income of the trust;
  • The success or failure of the trustee’s administration, as measured, e.g., by the growth in value of the investments or less tangible measures such as smooth administration (absence of disputes, distributions made promptly, no surcharges requested);
  • Any unusual skill, expertise, or experience that the trustee has brought to the position, e.g., investment management expertise;
  • The “fidelity” or “disloyalty” shown by the trustee (see §9.32);
  • The amount of risk and responsibility assumed by the trustee (personal liability), as measured, e.g., by negotiation of oil leases or management of a large office building;
  • The time that the trustee spent performing trust duties;
  • The custom in the community, including the compensation allowed to trustees by settlors or courts and the fees charged by corporate trustees; and
  • Whether the work was routine or required more than ordinary skill and judgment.

For application of these factors, see Estate of McLaughlin (1954) 43 C2d 462, 467; Estate of Gump (1982) 128 CA3d 111; Estate of Nazro (1971) 15 CA3d 218. See alsoCagnolatti v Guinn (1983) 140 CA3d 42, for the general proposition that the court may consider the trustee’s management of the trust property in determining the appropriate compensation.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s