Supporters Argue over Bill That Prevents Fee Gouging By CA Trustees

Posted on Jul 27, 2013

An advisor for a new California bill designed to protect the disabled and elderly from excessive court-appointed trustee fees has withdrawn his support, stating that the legislature “gutted” the legislation. The advisor, Attorney Matt Crosby, states that the newly revised version of the bill may actually make the situation worse.

The bill is Senate Bill 156 and was inspired by 38-year-old Danny Reed, who suffered from a brain injury and fought to protect his life savings from his court appointed trustee. The author of the bill is State Senator Jim Beall.

Senator Beall argues that SB156 still achieves its goal of better protecting dependent adults from financial abuse in the probate courts. It gives judges the complete power to regulate fees. It also provides “clearer and stronger” direction for California judges.

Crosby, however, feels that pressure from trade groups that represent lawyers and fiduciaries has resulted in “hollow feel-good legislation.” The intent of the bill was to address court-permitted excessive fees taken by court-appointed estate managers and their attorneys. Victims are often elderly and disabled clients who are powerless to object. In Reed’s case, for example, his court-appointed trustee charged him $108,771 after four and a half months of work. When Reed fought back, his trustee submitted more bills against Reed’s trust for his costs of defending his original charges. The new bill was designed to address this.

Regardless of your opinion as to whether the new version of SB156 will accomplish its goals, these scenarios outline the importance of creating an effective estate plan that includes a trust and names trustees that you have faith in and feel comfortable working with. The trust can also specifically address the issue of reasonable trustee fees and other trust expenses. A carefully designed trust may help prevent issues such as those described above during the trust administration process.

Contact our office of experienced Anaheim trust attorneys today for further information. You can reach our office at (714) 459-5481 to schedule a consultation.

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James F. Roberts
Founder and owner of the Law Office of James F. Roberts and Associates, a premiere estate planning law firm