When someone is appointed trustee, they are taking on a lot of responsibilities. Besides simply making trust payouts, the trustee must also make sure that they do certain things such as making wise investments with the trust principal, protect the trust from losses and make periodical accountings to the beneficiaries of the trust. For this reason, trustees are entitled to collect fees for their work. However, as most things covered by estate law, determining what the fees are can be difficult, meaning that the wisest course of action for a new trustee is to have the assistance of a Long Island estate attorney.
Similarly to executor commissions in estate law, trustee commissions are not based on a flat rate but are rather based on how much the value of the trust is. Factors such as how many trustees there are can also have an impact of trustee fees. A trustee may also be allowed to collect a commission for transactions done on behalf of the trust if those transactions are outside of the normal yearly commission.
Trustee commissions are disbursed out once every 12 month period. The period can begin on a number of days, including going by the calendar or fiscal year. The commission is paid partially by the principal and partially by the interest. The commission structure for trustees is as follows:
1. $10.50 per $1,000 of the first $400,000 of the principal of the trust,
2. $4.50 per $1,000 of the next $600,000 of the principal, and
3. $3.00 per $1,000 of the rest of the trust.
In some cases, more than one trustee may be appointed. In such a case, the amount that is disbursed depends on the value of the trust and the number of trustees. If the value of a trust is under $100,000, each trustee gets a full commission. If a trust is worth $100,000-$400,000 and there are one or two trustees, each trustee is entitled to a full commission, yet if there are three or more trustees, the commission will be divided up amongst all of the trustees. Finally, if the trust is worth more than $400,000 and there are one, two or three trustees, all of the trustees will get a full commission, however, if there are more than that, the commission will be divided up amongst all the trustees.
Finally, a trustee is allowed to take a percentage of each transaction as a fee for their work on that transaction of 1%. This would be for things such as making investments on the principal or making payouts.
If you have been appointed trustee, the commissions that you get paid are just one of the things that have to be included in an accounting to the beneficiaries on a periodic basis. For this reason, you want to be sure that the commissions are calculated and paid out correctly. Because of their complexity, you should have a Long Island estate attorney on your side to make sure that everything is done properly. If you are a beneficiary, you may need a Long Island estate attorney to make sure that the trustees are not taking more commissions than they are entitled to. Call the Law Offices of Albert Gurevich at (516) 777-0647.