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Amakihi

"Executor" compensation

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My brother and I are sole trustees in the revocable living trust established by my mother before she died. Her assets (consisting of home and contents, Certificates of Deposit, car, insurance policies), all in California, totalled between $800,000 and 900,000. We have been in accord on all decisions.

My brother lives 2 1/2 hours away from her home by car; I am 5 hours away by air. For this reason, he has handled about 90 percent of the work involved in settling the estate. Technically, we are each entitled to 50%, but I feel that he deserves compensation for all he has done. I have no idea what would be appropriate. Can you advise, please?

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An estate and a living trust are two entirely separate things. If everything was in the trust or passed by operation of contract (say, life insurance policies), there shouldn't be much "estate" work to be done.

I'm not clear what you expect folks to say to you from here, because you're essentially asking us to pull an answer (percentage?) out of our behinds. I have no idea what would be appropriate either given I don't know what was involved.

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As the prior response noted, you have referred both to a trust and to your mother's estate. My assumption is that your mother had no significant assets other than what was/is owned by the trust such that your reference to "settling the estate" is intended to refer to the administration of the trust. If that's not the case, and particularly if there are probate proceedings pending, then my comments below might not be applicable.

My first question for you is whether there are any beneficiaries of the trust (or heirs) other than you and your brother. If you and your brother are the only interested persons here, then you can agree to your brother receiving whatever you want. Even if there are others involved, you can agree to a 75/25 or 90/10 split of trustee compensation if you want.

As for what is appropriate, Probate Code Section 15680 provides that trustees shall be compensated in accordance with the terms of the trust, and Section 15681 provides that, "f the trust instrument does not specify the trustee's compensation, the trustee is entitled to reasonable compensation under the circumstances." Therefore, one would need to know all relevant "circumstances" (i.e., what work you and your brother have done in the administration of the trust) in order to speak intelligently about what might be "reasonable." However, if you want a basis of comparison, you might check out Probate Code Section 10800, which provides how much the personal representative of a decedent's estate generally receives ($19k for an estate valued at $800k). Here's a link where you can review the Probate Code: http://www.leginfo.ca.gov/cgi-bin/calawquery?codesection=prob&codebody=&hits=20.

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I apologize that my lack of familiarity with legal terms caused confusion. If I had a good grasp of all this, I wouldn't be writing for online assistance.

pg1067, I appreciate your sincere attempt to figure out what I was trying to convey! And that you managed to come up with some kind of a basis for comparison, however rough, based on Probate Code Section 10800, which is all I had hoped to get with the limited info I provided.

Just to clarify, there was no "estate". The total assets were in the trust and equally divided between my brother and I; no other interested parties and no probate. To my mind, he has done a lot of work: making multiple trips and phone calls to banks, completing paperwork, meeting with realtors and others, overseeing maintenance of the house, receiving and paying bills associated with the house, selling the car, etc. My Mom died a year ago, and the house is still on the market, so this is not a short-term thing.

As far as I can recall, my involvement has been limited to filing paperwork for a couple of insurance claims, getting a few documents (power of attorney, etc.) notarized, consulting with my brother and realtors on the phone and by internet, researching online the value of the car and some other small items. I have also spent a very labor-intensive week with him packing up and disposing of the items in a 3-bedroom house. As I said, the time he has spent has probably been 9 times what I have spent. I wish I could estimate the total hours we've each put into it, but I can't, and I'm sure he can't either.

He has asked for no compensation. He will be taking virtually all of the furniture (we are not dividing it nor am I being compensated for my "half"), some of which is quite valuable. When it is all complete, and we divide the proceeds of the house etc., I want to make sure that he receives something beyond 50% of all that for his trouble.

I understand that you can't tell me what that amount should be, but at least I now know what the probate code says would be appropriate for assets totaling $800,000 or so. Now I just need to estimate how much more work that situation would entail, compared to what our trust has entailed.

Thank you again.

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Guest FindLaw_Pierre

Thank you for your post. May I suggest a simpler approach.

Once the dust has settled and everything has been allocated, why not simply remit a check for a nominal fee to your brother. Say an extra 10-20% of your final portion?

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Amakihi said...

I just need to estimate how much more work that situation would entail, compared to what our trust has entailed.

I agree with Pierre. From the sound of things, anything you would offer would be more than your brother would demand or expect, and anything he would demand or expect would be less than you would think he should get. in other words, it sounds like you and your brother have a great relationship and that he's not likely to be concerned with getting what might objectively be considered a "fair" or "reasonable" amount. I would think that, if you were to raise the issue with your brother, you'd have no problem agreeing to something without having to go through any estimating of time spent or anything like that.

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