If I become the trustee of a Florida trust, will I get paid? Can I take compensation or a salary from a trust if I’m the trustee? Do Florida trustees bill hours like probate lawyers West Palm Beach? If fees are contested, what method does the Florida probate court use to assess them?
Florida Trustee Compensation
- In Florida probate litigation, trustees usually get paid according to a fee clause in the trust instrument.
- Can a trust allow for hourly rate payments?
- Can a trust specify a percentage of the assets to be paid to the trustee as payment?
- What if the trust is a corporate trust?
- Trust and estates attorneys know that confusion can arise when there is nothing in the trust agreement that specifies fees.
- What does a Florida trustee do in this case to ensure that they get paid what they deserve?
- Florida Statute 736.0708(1) provides that a trustee is entitled to “compensation that is reasonable under the circumstances,” but it does not specify how the courts should determine what fee is “reasonable”.
- When probate attorney’s fees are contested, it is required that they be assessed by the lodestar method or an hourly billing method.
- Does this mean that the court must use the lodestar method to determine trustee’s fees?
- Check out this January 6, 2016 Second District Court of Appeal Opinion that discusses the different methodologies that could be used to assess trustee’s fees when they are contested.
Robert Rauschenberg Foundation v. Grutman
- The Robert Rauschenberg Foundation, as “sole remainder beneficiary of the Robert Rauschenberg Revocable Trust, seeks review of an order awarding $24,600,00 to trustees Bennet Grutan, Bill Goldston, and Darryl Pottorf for their services.”
- Here, there was no provision specifying trustee’s fees.
- So how will the probate court Delray Beach determine whether the fees awarded to the trustees were “reasonable” under Florida Statute 736.0708(1)?
- Both parties argued that different methodologies should be used to assess the fees.
- What were the methodologies?
- Here, the Foundation argued that the lodestar method should be used, while the trustees argued that a set of factors in West Coast Hospital Ass’n v. Florida National Bank of Jacksonville should be.
- According to the court, legislative history of Florida Statute 736.0708(1) indicates an intent to apply the West Coast Factors.
- Therefore, the court affirmed the fee award of $24,600,000 to the trustees.
- If they would have applied the lodestar method, the trustees would have only been awarded $375,000!
- What are the West Coast Factors?
Want to find out and learn more?
Read the entire case by clicking here.