at 123. Compensation of trustee (a) If the terms of a trust do not specify the trustee's compensation, a trustee shall be entitled to compensation that is reasonable under the circumstances. Therefore, when the attorney is charging fiduciary fees, he or she should determine the appropriate fees to charge by applying the factors enumerated in McMahon to the services provided and the results obtained. 2. For more information, please visit our COVID-19 Resource Center | Racial Justice and Equity Task Force. After all, an executor’s work is often very similar to that of a trustee. ( Log Out /  Ct. at 443. In some cases, it would be more appropriate for the executor to hire someone to perform the work than to do it himself and charge his hourly rate. (2020), Venable Post-Election Series: Election Night Discussion (Nov. 4, 2020). Professional trustees rarely charge less than a 1% of the total worth of the estate as a fee. Amy Lonergan and Joshua Miller, managing director of Atlantic Trust, co-authored an article, "What is Reasonable? Still others leave their successor trustee a specific bequest instead of a fee. c. 203E, §708(a). Section 708: Compensation of trustee. §7768 Reasonable compensation; added factors a court may consider Rhode Island RI Gen.L. Change ), You are commenting using your Google account. David Fowler Johnson (Winstead PC): Administering Trusts in Recessions: Trust Loans to Beneficiaries (October 30, 2020), Forbes: The Serious Disconnect Between A Hot Residential Real Estate Market And The Coming Tsunami Of Foreclosures, Forbes: Rocker Gene Simmons Kisses Off California Taxes, Should You Too? App. With the increased use of the Intervivos Trust as the standard “middle class” estate plan, a typical question that arises is how the Trustees are paid. Probate Stars: Can You Vote With A Power of Attorney? Executor and Trustee Fees You may appoint an executor in your Will to wind up your affairs and distribute your estate on death. Post was not sent - check your email addresses! Accordingly, to determine what is considered “reasonable,” the fiduciary must look to Massachusetts case law. The Court prevented the executor from taking the broker’s fee because, in applying some of the factors enumerated above, such as the time expended and skill involved, the services performed by the executor in selling the property did not warrant the fee. What is Reasonable? If you’d like a bit more (free) help understanding the estate settlement process, you can answer a few simple questions and get a free custom executor plan here on Executor.org.. And, here are the executor fees by state, so you know how much compensation is reasonable. Ct. 1990 (1978), an appellate court held that “[t]he only rule of law is that the fiduciary is to receive just and reasonable compensation for all services performed in his trust.” The average fee is roughly 1%-5% of the corpus of the trust, but it … The trustee fee statute provides for an award of trustee's fees that are "reasonable under the circumstances" when the trust does not specify compensation. Fill in your details below or click an icon to log in: You are commenting using your WordPress.com account. A trustee is entitled to “reasonable” compensation. (It should be noted that all of the case law on this topic to date–including the cases referenced below–was decided before the enactment of the MUPC and the MUTC, but such case law is still considered the primary source of interpreting the “reasonableness” standard.). If a will fails to address the issue of compensation, the Massachusetts Uniform Probate Code (“MUPC”) contains a default provision, which states that “[a] personal representative is entitled to reasonable compensation for services.”  M.G.L. Courts have determined trustees’ fees by comparing the subject trustee’s fees to those of multiple other trust companies in the area.10 Courts have authorized corporate trustees to receive commissions based on their published fee schedules so long as such schedules are reasonable. fees of $60 million on assets that they claimed grew in value to over $2 billion due to their efforts.6 The trustees also submitted the certifications of two expert witnesses opining that, in their experience, the lodestar method is never used to determine trustee fees. What exactly is “reasonable compensation” though? The statute does not set forth a methodology for calculating "reasonable" trustee's fees or otherwise explain which circumstances should be considered. 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