Trustee Fees: How Much is Enough and How Much is Too Much?

I am often amused by the ads and offers I see concerning
living trusts.

Almost always, one of the big sales pitches is how a living
trust will save th*usands of doll*rs in "nasty" probate fees.

This leads the consumer to believe that you pay for probate,
but living trusts are "fr*e." (that is, after you've paid the
promoter to set one up for you).

Not so.

Here's an email I received from one of my subscribers
(she has given me permission to discuss her question in this
article):

Hi Phil,
My mom passed away recently and my sister is 1st trustee.
She claims she gets 10% of my mom's estate as 1st trustee.
Is this true? What is the normal fee for 1st trustee?

Great question. Often one of the biggest, if not the biggest,
areas of dispute between children or heirs after a death occurs.

What is a trustee fee? How is it calculated? Are there other
fees?

If you have a trust and don't know the answer to these questions,
I think the proper thought is "Uh-ohh!"

OK, let's have a quick review of trustee fees.

First let's make a distinction between the times a trustee may
be called upon to act.

Remember, one of the best uses of a trust is to manage the
assets of someone who is incapacitated. My best friend and
his sister have been managing their mother's affairs (as
trustees) for the last 10 years. Mom is 95, in decent physical
health, but has advanced Alzheimer's).

Let's save the discussion of trustees fees charged for
managing an incompetent's estate for a future article. Let's
get down to answering the above question.

Here it is again:

Hi Phil,
My mom passed away recently and my sister is 1st trustee.
She claims she gets 10% of my mom's estate as 1st trustee.
Is this true? What is the normal fee for 1st trustee?

Basically, the question is "How much can a trustee charge to
handle an estate after a death?"

How do we answer this?

First, we have to look at the trust instrument.

Most competently drawn trust instruments will have a section
that deals with trustee fees.

The better ones are fairly specific and make a distinction
between acting as trustee while the beneficiary is alive, but
incompetent, and acting as trustee after a death has occurred
(similar actions to what an executor performs through a probate).

So, first, we look to the trust instrument. Often it will specify
a fee. Sometimes it will say .75% to 1.25% of the total value
of the assets being managed and transferred (since this is the
typical fee charged by the professional trust companies run by
many banks).

In fact, let's see what California law tells us about trustee fees
(every state will have a statute, go to your county law library
and ask the law librarian to help you look it up).

In California, the law of living trusts is contained in the
Probate Code. Here is what Probate Code Sections 15680-82 tells us:

15680. (a) Subject to subdivision (b), if the trust instrument
provides for the trustee's compensation, the trustee is entitled
to be compensated in accordance with the trust instrument.

(b) Upon proper showing, the court may fix or allow greater
or lesser compensation than could be allowed under the terms of the
trust in any of the following circumstances:

(1) Where the duties of the trustee are substantially
different from those contemplated when the trust was created.

(2) Where the compensation in accordance with the terms
of the trust would be inequitable or unreasonably low or high.

(3) In extraordinary circumstances calling for equitable
relief.

(c) An order fixing or allowing greater or lesser compensation
under subdivision (b) applies only prospectively to actions taken in
administration of the trust after the order is made.

15681. If the trust instrument does not specify the trustee's
compensation, the trustee is entitled to reasonable compensation
under the circumstances.

So to answer the question, we have to find out what the trust
instrument says. If it is silent, then Section 15681 tells us the
compensation is to be "reasonable compensation under the
circumstances."

What is reasonable under the circumstances? If it were me,
I would gather up the brochures of the various bank trust
departments in the area to determine their rates. Where I
live, the fee is .75% to 1.20%, depending on the size of the
trust and the type of assets. The minimum is $5,000.

So, it looks like the answer to the question is that if the
trust instrument says the 1st trustee is entitled to 10%
compensation, then she may be. However, if it doesn't then the
amount to be charged must be reasonable.

And, even if the trust instrument said 10%, I would seriously
consider asking a court to change the compensation per
15680 (b) (2) that allows the court to change compensation
"Where the compensation in accordance with the terms of the trust
would be inequitable or unreasonably low or high."

This article needs to be continued since we haven't even
touched on the big m*ney m*ker for trustees and attorneys,
"extraordinary fees."

Good luck and until next time,

Phil Craig

P.S. Feel free to forward this on to any friends.

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© Phil Craig, All Rights Reserved

http://www.LivingTrustSecrets.com

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Probating a Will

A probate is, in very simple terms, a court certification that the will is valid. Probating a will is not always necessary, but it almost always is for more complicated wills. It is a good rule of thumb to probate a will, as it can help avoid speed bumps later on in administrating the estate and following the instructions of the will.

One of the main reasons people probate a will is if they have to interact with financial institutions. If all your money is in a bank when you die, it is unlikely the bank will hand over the money to someone who claims to be the executor of the estate, as if this person was not supposed to get the money the bank can be held liable. However, if the will has been probated then the financial institution cannot be found liable. And we all know how cautious banks are about liability, especially in today's global recession. You also have to probate a will if you are dealing with real estate or stocks in companies.

Therefore, in reality, if the will is not probated the deceased's assets are basically all frozen.

So how come it isn't always necessary to probate a will? Well, in some cases the executor of the estate already has access to all of the deceased's assets. The common case of this is when the spouse of the executor of the estate. The spouse would presumably have access to all bank accounts and finances, and because of this the will would not need to be probated.

If all the i's are dotted, and the t's crossed, then usually it takes a couple of weeks for a will to be probated once the documentation is filed. But filing out all the papers can take quite a while. It varies from jurisdiction to jurisdiction, but sometimes the papers can take weeks to fill out as it might require lists of all of the deceased's assets, and the value of the assets.

There are taxes on probating a will too! In Canada, probate taxes can be as high as 1.5% of the assets distributed through the will! The probate tax in Connecticut can be up to $12,500.

Reducing probate tax is a part of an estate plan, but it shouldn't be the main part. There's only so much you can do, so don't get carried away. A lot of schemes to reduce probate tax can end up causing trouble while you're still alive, like naming family members of beneficiary in the will as joint owners of property. That might sound like a good idea, but what if the new joint owner has some credit problems? Now the creditors can go after your property!

What you can do to avoid probate taxes varies a lot depending where you are, and if you believe probate taxes are a big issue you should talk to a professional.

So now you know what a probate is, and what it's for, but how do you actually probate a will? Well, just like everything else with probates it varies from place to place. Wherever you live there is probably a "probate kit" which will help you file the necessary documentation, and will cost you around $100. There are usually probate offices or surrogate courts, and if all else fails and you don't know where to turn to, talk to the lawyer who drafted the will.

Probating a will might have some costs associated with it, but a lot of the time it's necessary. If you don't know if it's necessary or not, talk to a lawyer or the probate office.

Criminal Records Search Through Public Police Records

We tend to just passively enjoy the conveniences and services rendered by the Police. Actually, we can greatly benefit from their Public Police Records if we were more proactive. It's easy to search public police records and if we do that any time we are uneasy about someone, there's no doubt that a great many crooks would have been spotted long before they could strike.

Police are renowned for their record keeping. It is standard police procedure to put into records all interaction with the public and it is estimated that 30% of all Americans will have some form of police records in their lifetime. Public Police Records are not limited to just criminal violations either. They include administrative and other civil matters such as address change, firearms permit, household accidents and so forth.

Public Police Records are governed by state laws. Hence, there are variations in the way they are administered. The general practice though is that the direct ownership of this function comes under the respective police departments. That being said, these records are uploaded onto the respective central repositories of each of the states.

Being public records, anyone has the right to access, view and make use of anybody's Public Police Records as long as rules and regulations are observed. They are obtainable directly from the local police department if the exact residence of the subject is known. If not, they can still be requested from other state agencies responsible and authorized for it.

To some extent, Public Police Records are already in routine use, at least in official circles. It is commonly used in large corporations in appraising and screening both potential and existing employees. It's also a standard procedure with many voluntary welfare organizations to run through Criminal Records Search in the assessment of their volunteers. Without doubt, they can be just as handy in private use.

Providing Public Police Records is a public service and is usually granted free of charge. Administration fees are charged at some public offices for this purpose but the amounts are typically nominal. Free Public Police Records can be requested by mail, walk-in, telephone, fax or most popularly nowadays, online over the internet from the various government offices or even some private websites offering it as a fringe service.

The problem with Free Public Police Records is that they normally entail queuing and waiting time. That's why the paid-version from commercial records providers is popular when time is of the essence and plug-and-play readiness of the records is sought. The information industry is fiercely competitive so with a little shopping, it's not difficult to find good value for money.

Sample Living Trust - Should You Use One

In my estate planning law practice I get asked all the time if it is ok to use a sample living trust from the internet.  My answer is maybe.  If your total estate tax net worth value is less than the estate tax threshold amount then you can do it yourself.

To calculate your net worth estate tax value, add the value from the following assets:

real property;
financial assets;
personal property; and
death benefits on life insurance you own on your life.

The threshold amount for federal estate tax is $3,500,000.00.  In addition approximately 19 estates have an estate tax threshold that ranges from $1,000,000.00 up to the federal amount.  If you are below these amounts and are willing to take the time to learn what each section of the trust means then you can and should draft your own document from an internet sample living trust. 

Please be aware though that many samples on the internet are just that, samples.  They fit a small population. If you fit within that box, then you will probably be fine.  If your situation is a little different then the sample living trust you are working from may not be the right option.

You should look for a product that gives you information and options and was created by an attorney.  Look for products that teach you about the trust.  Once you understand what makes up the trust document, you will be able to put it together to fit your individual facts and circumstances.

You also want a sample living trust product that gives you all of the supporting documents along with detailed information on how to fund the trust.

Going with a sample living trust can save you thousands of dollars in attorney fees but you need to take the time to understand which product is best.

Life After DUI - Get Back to Your Normal Life!

You may be wondering what your life will be like after a DUI conviction (in US). Once convicted, a DUI on your record can greatly affect your life. Your DUI conviction record will significantly impact your future employment opportunities, auto insurance rates and driving privileges. The worst part is that the DUI will stay on your record and continues to affect all aspects of your life for at least ten years. A ten years time can make a very big difference in your life but with a DUI on your record, it can become a roadblock that stops you to move on with your life!

As I mentioned above, a DUI conviction will affect you in the following areas: future employment opportunities, auto insurance rates and driving privileges. Now let's see how it affects you in each area.

1. Employment - How a DUI affects your future employment opportunities?

Majority of jobs these days perform a background check. So you cannot hide your conviction to your potential employers. Due to this, you may find difficulty getting a job for a position that you may be highly qualified for. As a result you may lose your monthly income and despite that you are required to pay all the court fines and fees.

2. Auto Insurance - How a DUI affects your Auto Insurance?

A DUI conviction can cause your auto insurance rates to sky rocket. Sometimes your insurance company may even drop you due to your DUI violation.

3. Driving Privileges - How a DUI affects your driving privileges?

Depending on your state, your drivers license may be immediately suspended after arrest or you are required to argue your case before your license is suspended. Remember that the DMV hearing, which is known as "administrative per se" hearing, is different from your DUI court proceedings.

Get back to your normal life:

Knowing all the distress a DUI conviction can cause in your crucial areas of life, what you can do to return to your normal life?

Regarding your employment opportunity after a DUI conviction, the best option available to you is to expunge your DUI record. Once expunged you do not have to disclose your conviction on a job application. Also, you will come out clean in background checks conducted by your employers, landlords or anyone. It's like your DUI never happened. You will have no problem getting a job now. However, you must disclose your conviction to certain employers like educational institution, law enforcement agency etc.

Besides, expunging your DUI conviction record can be helpful in getting re-licensed.

As with an auto insurance rates, it all depends on your state and your auto insurance company. Mostly, you are required to pay high price for at least three years and then your rates will return to normal.

So getting back on track after a DUI conviction is possible when you know what to do and take right action.

Rollover Accidents Among the Deadliest in US

One of the most dangerous accidents that could happen on the road are rollover accidents. These mostly happen to SUVs because they are heavier, considering that they have higher centers of gravity compared to other vehicles. These vehicles are top heavy, and manufacturer now no longer include roll bars on the vehicles. You can simply imagine the weight of the vehicle, and how fragile the passengers are if it starts rolling over.

Usually, the injuries sustained by victims of these accidents are close to fatal, and oftentimes, even result to death. In fact, rollover accidents statistics last year would tell you that of all fatalities that came from vehicle accidents, 82% of it were brought about by rollover accidents. This clearly shows that the risk associated with such type of vehicle is much higher compared to low vehicles like sedans.

When you are on the road, it cannot be denied however that you don't have any control on the other vehicles in the area. All you can do is to take the necessary precautions, so as not to get involved in an injury. However, since through sheer negligence drivers of other vehicles like SUVs were drunk or just simply wouldn't like to notice, they would just go on and drive without any care for the world. And, before they know it, they already got involved in an accident.

Of course, drivers of rollover accidents also sustain some injuries, however, the innocent ones or victims are those that suffer the most since they are often bystanders, or those people who are simply doing nothing at the sides, yet figured in a rollover accidents. Some of these injuries are broken bones, loss of limbs, brain injury, paralysis, and oftentimes death. This is because when the SUV starts rolling over, glass, and other parts of the vehicle are most likely to get broken and hurt the passengers. The roof and the sidings can collapse on the passengers as well if ever that a rollover accident occurs.

When this happens to you, it is always imperative that you file the rollover accident lawsuit at the earliest time; if it could be possible that you file it a month after the accident, or perhaps 2 or 3 months after. The important thing is that you file it within 2 years from the time that the accident occurred. If you file it after two years, the judge may dismiss your case since it has already lapsed the statute of limitations. Although there is no one who would stop you even if you do file after the statute of limitations has already lapsed, you just need to be ready in case the judge will dismiss it.

Driving After a DUI - How Your Attorney Will Get Your Hardship License After Your Arrest

While the array of penalties one suffers from a DUI arrest is overwhelming, the first penalty the accused often suffers, often as quickly as ten days after the initial arrest for DUI, is the loss of the ability to drive due to a suspended license. The DMV will suspend your license within ten days of your DUI arrest if there is evidence that your BAC is over a .08, or if you refuse to submit to a lawful test of your blood, breath, or urine. This guide will detail how a DUI attorney can help you get your hardship license back in both scenarios.

How a DUI Lawyer can help you get your hardship license if your BAC was over a.08

A BAC above a.08 gets you a 6 month suspension the first time, and a 12 month suspension the second time. Your Florida DUI Lawyer can request a formal review of the suspension on your behalf, provided you hire him with within ten days of your arrest. When the DUI lawyer requests that hearing, he can obtain on your behalf a hardship permit that lets you continue to drive pending the outcome of your hearing. This is the first opportunity to get a hardship license, and it will be good for an additional 42 days.

While you continue to drive, the Tampa DUI Attorney will prepare for your administrative hearing. During that time, the DUI lawyer will obtain the police reports, affidavits, breath test inspection and maintenance logs, and all the stuff necessary to prepare for the formal review hearing. If your Florida DUI attorney can successfully argue that the police lacked probable cause for to arrest for DUI, or that the Officer did not substantially comply with the rules regulating the blood, breath, or urine test, then the administrative suspension will be set aside, and your full driving privileges will be restored.

However, if the suspension is sustained, the hardship license will be taken away, and a period of "hard" suspension will begin. A "hard" suspension is a period of time during your regular license suspension when, no matter what your Tampa or Pasco DUI Attorney says or does, no hardship license will be issued. You cannot drive (legally), period.

The length of the hard suspension for a BAC over a.08 is 30 days. At the end of 30 days, you will be eligible for a hardship permit (again), provided you can show proof of enrollment in DUI school. Your Florida DUI attorney will set up a hardship license hearing for you, hopefully on the first day that you are eligible for a hardship permit.

How a Florida DUI Lawyer can help you get a hardship license if you refuse to submit to a lawful test of your breath, blood, or urine.

Most of the same principles apply if your license is suspended for a refusal as if it was suspended for a BAC over a.08. For example, you must still get to a DUI Attorney within ten days of your arrest so your right to appeal is not waived. Then, the Attorney will prepare for your formal review hearing. Again, if he is able to win your hearing, then the license suspension will be invalidated, and your regular license will be restored. However, if he cannot win the hearing, then a hard suspension will result.

A refusal suspension carries a hard suspension of 90 days for a first refusal, and eighteen months for a second refusal. That means if you are arrested for a DUI and refuse, and you had previously refused a test of your BAC on another occasion, you will be ineligible for a hardship permit for the entire length of your administrative suspension.

The preceding information only applies to the administrative side of your DUI case.

Please note that the suspension issues outlined above only deal with the administrative, or DMV side of things. If you go to court and ultimately plead to your DUI charge, you will suffer another separate and distinct suspension of your license, this time at the direction of the presiding judge. If it is a first DUI conviction, the suspension is for 6 months to 1 year. If you had previously received a hardship license to keep you driving during your administrative suspension, it will be taken away. The driver's license bureau requires you to go back and reapply to get your hardship back. Only this time, you will need to have completed any DUI school and treatment if necessary before they give you a hardship permit.