Trustee Compensation in California

In California, the language of the trust governs a Trustee’s compensation.  In cases where a Living Trust sets forth the Trustee’s or Co-Trustee’s compensation for managing the Trust, that schedule will determine how much a Trustee can receive as part of administering the Trust. However, most trust documents do not set forth a compensation schedule or are often silent on compensation whatsoever. Therefore, how is a Trustee to determine his or her compensation schedule?

In these cases, California Probate Code Section 15681 provides that a trustee’s compensation must be “reasonable.” The Courts take the following factors into consideration to determine the reasonableness of a Trustee’s compensation schedule:

  1. The gross income of the Trust;
  2. The success or failure of the trustee’s administration (measured by the growth of the trust’s value);
  3. Any unusual skill, expertise, or experience that the trustee has brought to the position;
  4. The loyalty of the trustee to the Trust;
  5. Risks and responsibilities assumed by the trustee;
  6. The time that the trustee has spent performing trust duties;
  7. Custom in the community; and
  8. Whether the work was routine or required more than ordinary skill and judgment.

See California Rules of Court 7.776.

If you are a Trustee in California and are uncertain on whether you can be compensated for serving as Trustee, or have questions on the reasonableness of your compensation request, please contact our firm at info@shirvanianlawfirm.com or call (818) 835-5396 to discuss with our attorney.

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