Compensation payable to the trustee is in addition to any attorney fees payable to the attorney or the attorneys firm for legal services rendered to the trustee. If the terms of a trust specify the trustees compensation, the trustee is entitled to be compensated as specified, but the court may allow more or less compensation if: The duties of the trustee are substantially different from those contemplated when the trust was created; or. If the trustee of a revocable trust retains an attorney to render legal services in connection with the initial administration of the trust, the attorney is entitled to reasonable compensation for those legal services, payable from the assets of the trust, subject to s. Unless otherwise agreed, compensation based on the value of the trust assets immediately following the settlors death and the income earned by the trust during initial administration at the rate of 75 percent of the schedule provided in s. An attorney who is retained to render only limited and specifically defined legal services shall be compensated as provided in the retaining agreement. Committee SECTION 1007. Trustee Fee Structure. Legal advice regarding claims for damage to the environment or related procedures. What is this document and why is it vital to ensure a proper probate closing? What constitutes an extraordinary service may vary depending on many factors, including the size of the trust. The attorneys participation in tax planning for the estate, the trust, and the trusts beneficiaries and tax return preparation or review and approval. Florida Trust Administration (Trustee Guide) - Alper Law Any delay in payment of the compensation after the services were furnished. The complexity or simplicity of the administration and the novelty of issues presented. The nature and value of the assets that are affected by the decedents death. Trust can be a real estate professional - Journal of Accountancy In planning your estate, it may be necessary to name a Trustee, which means you'll also need to understand Trustee fees. It is not uncommon for non-professional trustees, especially those who are family . A typical fee might be a quarter of what the professional trustee charges, or .25 percent (often referred to by financial professionals as 25 basis points). Non-professional trustees should use the above-mentioned guidelines before taking a fee. Considerations of special valuation of trust assets, including discounts for blockage, minority interests, lack of marketability, and environmental liability. In determining reasonable compensation, the court shall consider all of the following factors giving such weight to each as the court may determine to be appropriate: The promptness, efficiency, and skill with which the initial administration was handled by the attorney. The benefits or detriments resulting to the trust or the trusts beneficiaries from the attorneys services. , Read More What Is a Petition for Discharge? One can say that Non-profit organizations have founders, not owners. (2) If the terms of a trust specify the trustee's compensation, the trustee is entitled to be compensated as specified, but the court may allow more or less compensation if: Florida Statutes 736.0708 (1) establish that if the terms of a trust do not specify the trustees compensation, a trustee is entitled to compensation that is reasonable under the circumstances.. A trust is a legal arrangement in which the trust maker (also referred to as the trustor or settlor) transfers the nominal ownership of assets to a trustee (fiduciary) for the benefit of selected individuals (beneficiaries). If you administering a will, you are the personal representative (PR), not the trustee. This adds yet another layer to the process as you decide on who youll appoint to oversee and manage your Trust for you. In addition to the attorneys fees for ordinary services, the attorney for the trustee shall be allowed further reasonable compensation for any extraordinary service. Want to know what trustee fee factors are to be considered? 2. The trustee may be a professional trustee (such as a bank trust department or a lawyer), or may be a family Check out this from the West Coast Hospital Case. In most cases, the average amount of fees paid to a trustee in Florida range from 1% to 3% of the value of the trust. 515 East Las Olas Blvd. The written statement must be in a separate writing from the trust instrument but may be annexed to the trust instrument. Pankauski Lazarus PLLC represents clients throughout Florida, including the cities of West Palm Beach, Boca Raton, Delray Beach, Boynton Beach, Highland Beach, Riviera Beach, North Palm Beach, Abacoa, Wellington, Lake Worth, Palm Beach Gardens, Jupiter, Greenacres, Deerfield Beach, Pompano Beach and Fort Lauderdale, as well as other communities in Palm Beach County, Broward County and Miami Dade County. How Do Multiple Trustees Divide the Fees? Legal advice regarding carrying on of decedents business or conducting other commercial activity by the trustee. 415 South Olive Avenue West Palm Beach, FL. In fact, for the ordinary services of an attorney during the initial trust administration, the amount presumed to be reasonable, based on the value of the trust assets immediately following the settlors death and the income earned by the trust during initial administration, is 75% of the schedule provided in the statutes for compensation of the personal representatives attorney. Legal advice regarding claims for damage to the environment or related procedures. The Florida Trust Code is a body of statutes created by the legislature for trustees and beneficiaries to follow. Any agreement relating to the attorneys compensation and whether written disclosures were made to the trustee in a timely manner under the circumstances pursuant to paragraph (1)(b). First, read the trust document! The trustee shall be entitled to a summary of ordinary and extraordinary services rendered for the fees agreed upon at the conclusion of the representation. On an estate with an inventory value of $500,000, the attorney for the personal representative would be entitled to $15,000 in fees ($3,000 for the first one hundred thousand dollars of inventory value plus 3% of the next four hundred thousand dollars of inventory value, or $12,000). West Coast Hospital Association vs. Florida National Bank of Jacksonville. Under Florida law, the personal representative of an estate (sometimes also called an executor) and the trustee of a trust are entitled to compensation, as are the attorneys who represent the personal representative and trustee. On average, trustee fees can range from 1% to 3% of the trust assets. Trustee Compensation - What Is Reasonable & Should Be Considered? Filing a nontaxable affidavit, if not filed by a personal representative. The IRS issued a notice of deficiency after it classified the trust's rental real estate activities as passive and in turn reduced the trust's NOL carrybacks to 2003 and 2004. PDF Reasonable Compensation If the trust instrument has no language specifying the trustees compensation, Florida law states that the trustee is entitled to reasonable compensation. However, the statutes do not provide a specific threshold to define which percentages are deemed reasonable.. An employee or attorney employed by the same firm as the attorney at the time the trust instrument is executed. Despite Florida having no statutory schedule for trustees fees, a standard range of trustees fees is generally recognized by corporate or professional Florida fiduciaries. Ironically, the larger the estate, the lower the percentage typically is. 2006-217; s. 7, ch. (904) 823-3333 Unlike the personal representative fees, the statutes do not provide guidance as to what is deemed reasonable compensation. However, Florida case law has established a long list of factors that are to be used in calculating trustee fees, some of which are: Case law further established that the lodestar method of determining fees (i.e., multiplying the number of hours reasonably expended by a reasonable hourly rate) and fees based on the percentage of the trusts value are not to be used when calculating reasonable compensation for a trustee. Knowing the difference between reasonable fees and excessive trustee fees is key. This initial period is not intended to include continued regular administration of the trust. Here again, the statutes provide guidance as to what is considered reasonable compensation, and it mirrors that of the reasonable compensation of the personal representatives attorney. Under the Florida Trust Code, A Trustee is entitled to compensation that is reasonable under the circumstances. F.S. A state where estate values tend to be smaller could be reflected in smaller compensation (even if the percentage is the same as somewhere like California). But most experienced expert trust trial lawyers, like John Pankauski, will tell you that the devil is in the details. The first is from the Second District Court of Appeal. The fundamental criteria arereasonableness, determined in the light of the facts and circumstances of each individual case. For income tax purposes the same term is used to mean the person who is taxed on the income . The summary shall be provided by counsel and shall consist of the total hours devoted to the representation or a detailed summary of the services performed during the representation. Some of a Trustee's common responsibilities could include: Filing and paying all taxes. Map & Directions [+]. We are able to do remote consultations in Zoom for all cases. 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