One that creates a Living Trust (or Irrevocable Trust, or other kind of Trust) is called the Settlor or Trustor. The Beneficiary receives the benefit of the Trust and is said to hold the equitable title to the property. The Trustee hold the legal title and is essentially the manager of the property for the benefit of the Beneficiary. Most of the time when a couple or individual sets up a Revocable Living Trust, they will be the Settlor, Trustee, and the primary Beneficiaries. In the case of a married couple, they will be considered co-trustees. A co-trustee can usually act alone, or in conjunction with the other co-trustee, and takes over if the first Trustee dies or becomes incapacitated.
A Successor Trustee takes over as Trustee upon the occurrence of a specific event. Usually this event is when the Trustee dies or loses capacity. The successor Trustee is usually a trusted family member or friend of the family. Sometimes the Successor Trustee will be a Professional Fiduciary Trustee. This may be advantageous in a variety of situations including where the Trustor has no family, where the children Beneficiaries don’t get along, or where the Trust may continue for a long period of time after the Trustor death.
The Trust document itself can detail how much the Trustee compensation will be, and how it is to be paid. California Probate Code section 15680 says in part that if the Trust provides for compensation, then the Trustee is entitled to such compensation, and that the amount may be adjusted up or down by the court if the Trustee duties are substantially different from those contemplated when the trust was created, where the compensation in accordance with the terms of the trust would be inequitable or unreasonably low or high, or in extraordinary circumstances calling for equitable relief. Further, the Probate Code dictates that any such raising or lowering of compensation will only be applied prospectively after the court order is made.
California Probate Code also says that if the Trust document does not specify what the Trustee compensation will be, then the Trustee is entitled to “reasonable compensation” (Probate Code section 15681). Moreover, the court can order that the compensation continue for as long as the court determines proper in either situation – where the Trust document details compensation, and when the Trust document does not (Probate Code section 15682).
There are other rules and situations that affect Trustee compensation that will not be discussed here in this particular blog.
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Thanks for reading my blog.
William Daniel Powell
This document is for informational purposes only. Nothing in this is to be considered legal advice. Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship. If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction. I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information.
Also, please remember that I speak in generalities in my blog and my website. There are so many different factors that can contribute and completely change the outcome that it would be impractical to discuss all of them here.