While Disneyland may be the “Happiest Place on Earth,” a California probate court may be the opposite for a Disney heir, mused the U.S. Court of Appeals in Lund v. Cowan (9th Cir. 2021) 5 F.4th 964. Bradford Lund, a 50 year-old grandson of Walt Disney, sued the probate judge who rejected a settlement
We started Trust on Trial with a post on undue influence in November 2015 and now mark the blog’s fifth anniversary. We thank readers of our “five cents” for their feedback, reflect on where we’ve been, and look towards the future.
Focused on California trust and estate litigation, and dispute avoidance, we have published 127
Bank trust departments, also referred to as corporate trustees, provide professional management to the administration of California trusts. People may choose to name a bank to act as successor trustee when they can no longer manage their own assets, either because they don’t have family members they can count on to handle assets or because they don’t want to burden family members with the role. Sometimes family members or a court may appoint a bank to take the place of an acting trustee as a means to resolve disharmony amongst the parties.
Alysia Corell joins us here to share her experiences as a trust officer. Alysia grew up in the Mt. Shasta area of Northern California and traveled south to attend San Diego State University where she majored in communications. She began to work in a bank trust department in 2003 and became a Certified Trust and Financial Advisor in 2008. She is a past president and current member of the Sacramento Estate Planning Council and a member of the South Placer Estate Planning Council. In 2018 Alysia joined the trust department of Exchange Bank.
Tracy M. Potts has nearly three decades of experience in California with estate planning, administration and litigation. A Texas native, she earned her law degree from Southern Methodist University School of Law. Her leadership experience includes chairing the Executive Committee of the State Bar of California, Trusts and Estates Section, as well as the Sacramento County Bar Association, Probate and Estate Planning Section. She is a certified specialist in estate planning, trust, and probate by the State Bar of California, Board of Legal Specialization. She also is a fellow of the The American College of Trust and Estate Counsel.
Tracy’s law firm, Legacy Law Group, operates from the Natomas area of Sacramento. I sat down with Tracy at her office in February 2020 to discuss estate planning and dispute avoidance.
This blog post views a trustee’s fee from the beneficiary’s perspective. Under California law, a trustee generally can set his or her own fee and collect it without prior disclosure to the beneficiaries. What can a beneficiary, who sees a hand reaching too greedily in the trust cookie jar, do in response?
We discussed best practices for a trustee when claiming a fee in a prior post and now consider how a beneficiary can monitor, evaluate and object to a trustee’s fee.
What is a reasonable trustee’s fee in California for a family member who acts as trustee? We see a high degree of conflict over this issue even when the amount of the claimed fee is small compared to value of the trust estate. Our blog analytics show that our post of a few years ago on the fee issue continues to draw a high number of hits. If you found this post in a Google search, you are probably grappling with a fee dispute in your family’s trust.
California Probate Code section 15681 generally permits a “reasonable” fee, but the term is hazy in practice. Most California Superior Courts do not have fee guidelines in their local rules. While California Rule of Court 7.776 lists factors a court may consider in reviewing trustee compensation, the trustee and the beneficiaries are likely to apply those factors differently. Accordingly, fee disputes are common in California trust litigation.
Here we’ll discuss best practices for a trustee with respect to claiming a fee. Let’s use the common situation where Mom and Dad have picked one of their several children to act as successor trustee when they die or become incapacitated. When Larry becomes the trustee, siblings Moe and Curley may be resentful and thus disinclined to go along with any fee.
Trustee fees are common flash points in the administration of family trusts. Trustees may put in hundreds of hours cleaning out and selling the family home, dealing with accountants, lawyers, and realtors, and otherwise working to distribute assets out to the beneficiaries. A diligent trustee provides a valuable service and should be compensated for his or her time.
From the beneficiary’s perspective, however, it may come as a surprise that Junior has obtained a handsome trustee fee by writing a check to himself. The beneficiary may feel that Junior should act as a volunteer and/or may believe that Junior has acted improperly in trust administration such that he deserves no fee.