Trustee Services and Fees
Choosing who should serve as your trustee, your agent under a durable power of attorney, or as a guardian or conservator is not a task to be taken lightly. Here are some topics we'll cover to help you get your bearings:
Note that we also offer Daily Money Management services.
For cases other than Daily Money Management, we require a minimum Net Asset Value (NAV) of $1 million. This is the net value of an estate after subtracting all liabilities from the sum of all assets.
At Bedrock Fiduciaries, we perform most services on an hourly basis. Why? Because we believe flat percentages, the primary alternative, are virtually guaranteed to be a bad deal for one party or the other. In cases where the monthly workload proves stable, we will consider converting to a fixed monthly retainer so as to reduce the bureaucratic coefficient of drag and billing complexity, but absent such stability we feel that hourly fees – which we track carefully using an bespoke semi-automatic electronic logging system – are the most fair and reasonable for all concerned.
The primary roles we assume as professional fiduciary are:
- Successor Trustee
- Agent under Durable Power of Attorney
- Guardian (of a minor)
- Conservator of Estate (for an adult who has been declared by a court to be unable to manage their own affairs)
- Estate Administrator
- Executor Services provider, acting as or with executor
As discussed in the section above outlining the range of responsibilities a fiduciary may assume, these roles can either be relatively focused on the financial affairs of an estate (of a party either alive or deceased) or more broad, encompassing a duty of care to a client or the beneficiaries of an estate. For an example, a trust may provide investable assets to be managed on behalf of a beneficiary for their education until they reach a certain age, at which point the remaining assets pass to the beneficiary. In such a case the trustee is responsible for ensuring that the assets are properly invested and for making necessary tuition and tuition-related payments. The trust may also stipulate that food and shelter shall be provided for the beneficiary, which requires further direct involvement by the trustee to ensure reasonable arrangements are in place – not the purchase of a mansion, nor relegation to a slum, with reasonable lease terms, for example. In short, in some cases the duties are fairly straightforward, while in others there is considerable complexity – and at times, ambiguity.
Our hourly rate is derived from the aforementioned level of complexity and degree of ambiguity, along with the level of risk (responsibility) we are assuming. When acting as trustee for a court-supervised trust specifically, the following guidelines apply based on the 2020 California Rules of Court:
In determining or approving compensation of a trustee, the court may consider, among other factors, the following:
- The gross income of the trust estate;
- The success or failure of the trustee's administration;
- Any unusual skill, expertise, or experience brought to the trustee's work;
- The fidelity or disloyalty shown by the trustee;
- The amount of risk and responsibility assumed by the trustee;
- The time spent in the performance of the trustee's duties;
- The custom in the community where the court is located regarding compensation authorized by settlors, compensation allowed by the court, or charges of corporate trustees for trusts of similar size and complexity; and
- Whether the work performed was routine, or required more than ordinary skill or judgment.
More broadly, a trustee is entitled to compensation in accordance with the terms of the trust they are administering, or if none is specified then "reasonable compensation" – which in turn may be greater or lesser where the duties of the trustee are substantially different from those contemplated when the trust was created. For a complete overview of trustee compensation in California as defined by the Trust Law section of the Probate Code, review the California Legislative Information website [15680 -15688].