Strict Rules Surround Compensation for Attorneys Serving as Trustees

When you sit down with your estate-planning attorney and develop a plan that will accomplish your family’s goals, an important step is to choose the individuals who will be in charge of carrying out that plan once you pass away. For estate plans that include living trusts, the person chosen to serve as successor trustee has perhaps the most important role of anyone involved in conducting the administration of your estate.

Some clients opt to appoint an attorney to serve as a successor trustee. The attorney who serves as successor trustee while also serving as the attorney in charge of the trust administration must be aware of special rules relating to his or her compensation.Compensation for

Attorney Trustees: The General Rules

  1. An attorney who is serving as a trustee of a trust may receive compensation for his legal services performed for the trust.
  2. An attorney who is serving as a trustee of a trust may also receive compensation for his trustee services.
  3. It is essential, however, to understand that the attorney trustee can choose to receive compensation for one of these services, but not both.
  4. If the attorney wants to receive compensation for both services, he must obtain approval for the right to dual compensation from the probate court.
  5. Beneficiaries or other interested parties may object to such request after receiving notice.
  6. Obtaining a waiver from an interested party is not sufficient to entitle a trustee, who is also the attorney, to receive compensation for both services.

Failing to abide by these rules as a trust administration is carried out in Orange County can result in potential harm to the property of the trust as well as possible liability or discipline imposed upon the attorney trustee. For example, if the attorney were to receive double compensation without following the proper procedures for obtaining permission, the trust would be paying too much in legal and trustee fees.

Issues surrounding compensation during a trust administration are often complex. To learn more, or for assistance implementing an estate plan, call our office today to schedule a consultation.