California Trust Administration Fees

There has been an elevated interest in the fees attorneys charge to administer trust. In California, there is a schedule in the probate code for standard fees for probate cases set forth as: 4% of the first 100,000, 3% of the next 100,000, 2% of the next 800,000, and then 1% of the next 9,000,000. Most cases are covered by the above fixed schedule. These fees include the normal work associated with selling property. Resolving disputes and other complex issues  are usually submitted to the court based on an hourly calculation.

In trusts the attorney is limited to reasonable attorney fees unless an amount is set forth in the trust declaration which is rarely seen. So the question becomes how much are reasonable attorney fees to administer a California trust until closure? Most attorneys seem to charge based on an hourly calculation however, that still fails to get us very far down the road in determining the amount of attorney fees charged in trust administration.

We know that it costs far less on average to administer a trust compared to probate. However, how much less is difficult to answer. It’s like trying to answer how much will it cost to build a house. To answer either question with a ballpark  estimate a little information needs to be known about the trust documentation, the assets, the family and the qualifications of the trustee or other complexity. Information on each of these subjects will be valuable to the California attorney trying to evaluation the amount of his prospective fees in administering a California trust.
First factor being the trust declaration. The attorney will want to know if the declaration is easy  to understand  – is there any confusing wording and are all the amendments or restatements available to read? To often, the creators restate or amend their trust with keeping the prior declaration which may cause some confusion in the administration of their instructions.
Then the attorney is going to want to know the situation of the assets in estimating a fee for administering a California trust such as are all the assets in California or are some in other states.  The attorney will want to know if there is a business involved or real estate and the condition of each of those assets. The attorney will want to verify that all the assets of the creator of the trust have been transferred to the trust.
Selling real estate in a trust can be a complicated task as a defect may not be know to the administrators of the estate. Once I administered an estate that had been a garage from the 1930s which had obvious signs of pollution. It was impossible to estimate how we would work this problem out at the beginning of the case. Although it eventfully worked out well for the estate, a business or other complicated asset makes the estimate all that more difficult.
The last primary concern I listed above is qualifications of the trustee. In this regard, the attorney is going to want to know how well the trustee is at keeping records. Accounting is a big issue which starts with listing all the assets at the time of death and their value. Then it goes on from there. The access the attorney will have to the trustee will make that attorneys job easier and lower the fee he will charge in assisting in the administration of the trust
Also if there is some special complexity that is out of the ordinary then of course added attorney fees will be incurred. Sometimes it would actually have been less expensive to administer the estate in probate, but this is rare. Most California attorneys recommend probating real estate in need of significant repairs. This is so the property can be sold as is in a probate sale.
The good news is that the California Superior Court retains jurisdiction over the administration over all aspects of  trusts in California and if a dispute arises over fees it can be resolved by the local  probate Judge. In San Diego, the current probate Judges are Hon. Julia Kelety and Hon Jeffery Bostwick.
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