Are you in the midst of appointing a trustee? If so, you’ve likely considered hiring an institution to administer your trust assets. These corporate trustees are known for using fee schedules to manage their payments, as opposed to private and professional trustees who take either an hourly salary or a percentage of your trust’s annual value. But how does a California fiduciary fee schedule work?
Before onboarding an institutional trustee, it helps to understand their use of fee schedules. With this information, you can compare and contrast against private and professional trustees to make the best appointment for your trust.
California Fiduciary Fee Schedule, Defined
Your trustee fees will vary depending on the type of trustee in place, be it a private, professional, or corporate trustee. Keep in mind that private trustees are most often family members, professional trustees are hired-on fiduciaries, and corporate trustees are institutions such as banks or investment firms.
Of these options, only institutional trustees publish a trustee fee schedule to follow. These schedules are meant to further control the trust while lowering financial risk, which are two common worries among trustees. Rather than being a literal schedule of payments, a California fiduciary fee schedule outlines the compensation due to the trustee as the trust’s value increases. Here’s an example:
Institutional Trustee Fee Schedule
|First $2 million||0.20% to 0.30%|
|Next $2 million||0.19% to 0.25%|
|Next $3 million||0.09% to 0.21%|
|Over $10 million||Negotiable|
|Minimum Annual Fee||$3,000|
Institutional trustee fee schedules, such as the one above, require court approval before going into effect and include a minimum annual charge alongside percentages of the trust’s value. Grantors opt for corporate or institutional trustees because of their deep expertise, broad network of experts to solve legal issues, and management of tricky situations. Visit our blog on calculating annual trustee fees for more details on average corporate trustee costs.
Choosing Your Trustee
Now that you understand how a California fiduciary fee schedule is structured, you should have an idea of which trustee type is best for your trust. You may want a family member or close friend as your trustee due to existing trust and lower costs or decide otherwise since they tend to lack trust knowledge. A professional trustee’s expertise will avoid common pitfalls, but their fees may be too high for your liking. Institutions may offer more control and risk aversion through a trustee fee schedule, but their fees are also quite high. With this knowledge, you can make an informed trustee appointment – but if you require further help before making your choice, don’t hesitate to consult Gokal Law Group for legal navigation.
Administer Your Trust with Gokal Law Group
If you require trust administration help or trust litigation services, contact an Orange County trust attorney to ensure you trip over any legal pitfalls. Gokal Law Group is your go-to law firm for help navigating trust litigation, estate administration, and cases of elder abuse. We have a track record of successful verdicts and settlements, especially when confronted with highly combative estate disputes. Our attorneys are tried and tested in helping trustees administer their estates and trusts, as well as litigation if negligence or self-dealing is at play.
Each of our attorneys has vast years of experience in their practice area, providing them the knowledge, skill, and vision to rightfully represent you. Learn more about Gokal Law Group, and reach out to our offices for assistance in enforcing or invalidating changes to trusts.