Thursday, December 5, 2013

As Successor Trustee of my Parent's Estate, am I allowed to pay myself?

As an executor of your parents’ trust you are allowed  "reasonable compensation for services.” 

In order to determine what “reasonable compensation" is, I look at two sources:  

1) California Probate Code Section 10800
The first is the California Probate Code Section 10800, which sets fees for what an executor or attorney can charge. These fees are based on a sliding scale, starting at 4 percent of the first $100,000, 2 percent of the next $100,000, etc. For example, the executor’s fees on a $300,000 estate would be $8,000.  

2)  Other Fee Standards
The other source I look at is, “What would a bank or financial institution charge?” The banks publish a fee schedule, and you can contact a bank directly for their fees.  Typically, a bank will charge 1-1/2% to 2% per year, for their fees.  Each institution has the right to set fees.

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