Anodos, a trustee governance consulting firm, today announced the publication of an article in the April 21 issue of the peer reviewed California Trusts and Estates Quarterly. The article titled "How Much Is Too Much to Pay a Trustee? An Analysis of the Facts-and-Circumstances Test of the California Rules of Court, Rule 7.776" was co-authored by Josh Yager of Anodos and Peter Myers of Fox Rothschild.
"Few trust documents give any direction about how the trustee’s compensation should be calculated," said Josh Yager, principal of Anodos Advisors. Predictably this leads to frustration and even litigation between trustees and the beneficiaries they serve. "A well-organized Trustee Compensation Study can significantly reduce friction between these parties."
Fortunately, the California Rules of Court have provided guidance on what factors are to be considered when establishing a trustee’s compensation. Several of these factors are (1) the trustee’s skills, experience, and expertise, (2) the risk and responsibilities assumed by the trustee, (3) the common practice in the community and (4) the amount a corporate trust company would have charged to do the same work.
"The portion of our article that I think will be particularly helpful to the California Trusts and Estates readers is the supporting fee schedules of the leading corporate trust companies in the state," said Peter Myers, partner at Fox Rothschild. "This corporate trustee fee data is difficult to collect and organize. I am hopeful that it is a resource to our colleagues for years to come."
The authors also conducted an inventory of the 58 counties in CA to identify any local rules of court that inform analysis in the article.
"It’s interesting to see how the counties in northern California more frequently adopt local rules which inform the trustee fee analysis than the southern California counties," observes Myers. "Integrating your local rules of court into a trustee fee petition or the trust account would be considered a best practice."
About Anodos: Anodos is a governance consulting firm that helps trustees establish, maintain, and evaluate their internal fiduciary governance systems. Common engagements include conducting investment benchmarking studies, trustee compensation reports, drafting/reviewing Investment Policy Statements, and evaluation of the trustee’s existing governance practices. What makes Anodos unique is that it does not serve as an investment consultant or advisor, nor in any way is responsible for managing the trust’s capital. Anodos is independent with no vested interest in our findings or recommendations. For more information, visit www.anodosadvisors.com.
About Fox Rothschild: Fox Rothschild’s Taxation & Wealth Planning attorneys provide their clients with sophisticated estate planning advice to help preserve wealth, but we also assist trustees and executors with the administration of trusts and decedent’s estates, helping them navigate the often complicated system of intestacy laws and providing advice regarding fiduciary responsibilities. In addition, we are frequently called upon to provide expert testimony in estate, trust and tax matters. For more information, visit www.foxrothschild.com.
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Josh Yager, Esq., CFP®
5290 Overpass Road, Suite 217
Goleta, CA 93111
(805) 899-1245 (ph & fax)