Are they just doing normal paperwork thats routine, easy to understand and explicit? A state where estate values tend to be smaller could be reflected in smaller compensation (even if the percentage is the same as somewhere like California). Some firms also charge a minimum annual fee to protect themselves against putting in a lot of work for relatively small estates. In fact, for the ordinary services of an attorney during the initial trust administration, the amount presumed to be reasonable, based on the value of the trust assets immediately following the settlors death and the income earned by the trust during initial administration, is 75% of the schedule provided in the statutes for compensation of the personal representatives attorney. This initial period is not intended to include continued regular administration of the trust. Florida Statutes Definitions Index (2022), Table Tracing Session Laws to Florida Statutes (2022), Index to Special and Local Laws (1971-2022), Index to Special and Local Laws (1845-1970). And trust expert lawyer John Pankauski has given us a roadmap. On an estate with an inventory value of $2,000,000, the attorney for the personal representative would be entitled to $55,000 in fees ($3,000 for the first one hundred thousand dollars of inventory value, plus 3% of the next nine hundred thousand dollars of inventory value, or $27,000, plus 2.5% of the next one million dollars of inventory value, or $25,000). Is there a question here we didnt answer? How Long Do You Have to File Probate After Death? So, what are the rules for Florida Trustee Compensation? 3. The trustee shall be entitled to a summary of ordinary and extraordinary services rendered for the fees agreed upon at the conclusion of the representation. An irrevocable trust is an agreement among a settlor, trustee, and beneficiaries that cannot be revoked or amended. If this return is prepared by the attorney, a fee of one-half of 1 percent up to a value of $10 million and one-fourth of 1 percent on the value in excess of $10 million, of the gross estate as finally determined for federal estate tax purposes, is presumed to be reasonable compensation for the attorney for this service. And it's not uncommon for a personal Trustee to not take any compensation at all. The compensation to the attorney is payable out of the estate assets. As a trust litigator who also handles Trust Appeals, John Pankauski knows that opinions from appeals courts are important. In this legal commentary, Florida trust litigator John Pankauski will provide insight. Florida Trust Code Statute 736.0708 tells you about reasonable compensation. Can You Own a House and Get Medicaid in Florida? If youre at the very beginning of the process, and just starting to set up your Trust or other Estate Plans, youre probably dealing with a lot of moving pieces. A typical fee might be a quarter of what the professional trustee charges, or .25 percent (often referred to by financial professionals as 25 basis points). The first step to determine a trustees compensation is to look at the language used in the trust instrument. Some professional trustees charge a minimum of $5,000 a year. Taking a closer look at case law, it is possible to find cases in which courts determined that the lodestar method is not appropriate to calculate trustees fees. Fortunately, you dont necessarily need to come up with a rate or compensation amount to be included in your Trust. The lodestar method is often used to calculate attorneys fees by multiplying the number of hours reasonably applied to solve a case by a reasonable hourly rate. Involvement in fiduciary, employee, or attorney compensation disputes. Extraordinary services may include, but are not limited to: Involvement in a trust contest, trust construction, a proceeding for determination of beneficiaries, a contested claim, elective share proceedings, apportionment of estate taxes, or other adversary proceedings or litigation by or against the trust. On an estate with an inventory value of $80,000, the attorney for the personal representative would be entitled to $3,000 in fees ($1,500 + $750 + $750). Accordingly, the following table sets forth the amount of compensation that is presumed to be reasonable: Ordinary services during the initial trust administration include review of the trust instrument, implementation of the successor trustee, serving of notices, and other services. Despite them being a normal part of any Estate Plan involving a Trust, there still are a lot of questions surrounding what reasonable Trustee fees actually are. 33401, 2023 by Pankauski Lazarus PLLC. Non-professional trustee fees, on the other hand, generally fall between 0.5% to 1% of the value of trust assets per year. On a trust with assets of $2,000,000, the attorney for the trustee would be entitle to $41,250 in fees ($2,250 for the first one hundred thousand dollars of trust assets, plus 2.25% of the next nine hundred thousand dollars of trust assets, or $20,250, plus 1.875% of the next one million dollars of trust assets, or $18,750). Order of payment of expenses of administration of the trust and order and priority of abatement of trust distributions. Trustee fees by state can vary, and while there really arent state-specific rules about how much a Trustee should be compensated for their role, there are some reasonable compensation (mending, what the norm is) guidelines. Persons who must or should be served with required notices and the method and timing of such service. Fill out this form for a complimentary case evaluation. If a separate written agreement regarding compensation exists between the attorney and the decedent, the attorney must provide a copy to the personal representative prior to commencement of employment. Consumer Pamphlet: The Revocable Trust in Florida First, you want to look at the size of the Trust. When are Florida Trustee Fees too much? The amount of capital income received and disbursed by the trustee, The wages or salary customarily granted to agents for performing light work in the community, The success or failure of the trustees administration, Any unusual skill or experience the trustee brought to the trust administration, The loyalty or disloyalty of the trustee to the beneficiaries, The amount of risk and responsibility assumed by the trustee, The time involved in administering the trust, The custom in the community as to the compensation of trustees by settlors or courts and as to compensation paid trust companies and banks serving as trustees, The character of the work performed by the trustee, Any estimate the trustee has given of the value of his or her own services, Payments made or allowed by the beneficiaries to the trustee intended to be applied toward the trustees compensation. Reach out to us today or Chat with a live member support representative! Non-professional trustees should use the above-mentioned guidelines before taking a fee. Any delay in payment of the compensation after the services were furnished. It is not uncommon for non-professional trustees, especially those who are family . And with everything that goes into creating your Estate Plan, choosing a Trustee can be one of the most complicated aspects, because its such a complex role and you must truly trust the person you select. A lot goes into creating a comprehensive, effective Estate Plan. If the amount or method of determining compensation is not provided in the agreement, the attorney is entitled to a reasonable fee, taking into account the factors set forth in subsection (6). Trial Attorney | LEGAL-CAREERS | Department of Justice The benefits or detriments resulting to the trust or the trusts beneficiaries from the attorneys services. The answer appears to be no unless the trust provides otherwise, there is a separate agreement with the settlor provides otherwise, or a trustee is providing a special service that warrants an additional fee. Each trustee compensation case is so fact specific says Pankauski.