|Central Trust Company|
The term "trustee" is used in many different legal fields. For example, in bankruptcy a trustee is appointed for administering the bankruptcy estate, in the case of a foreclosure the trustee is responsible for handling the property's foreclosure and in the case of a trust, a trustee is required in order to administer the trust. The following are some questions that delve into the topic of a trustee of a trust, whether irrevocable or revocable.
4. What duties does a trustee?
Trustee compensation is not a matter of right for the trustee. Thus, the trustee may be entitled to no compensation if so provided by the trust document.
- The trustee is compensated in accordance with a set formula. For example, it is common for a trustee to be compensated 1% of the value of the trust estate annually;
- In the case of a corporate trustee, it has a published fee schedule;
- The trustee is paid a fixed amount per year;
- The trustee is entitled to "reasonable compensation." Probate Code §15681
7. Can a person refuse the selection as trustee?
Yes, and a person has the right to decline trusteeship even after assuming the position. Prob C § 15640.
Yes, California law permits a trust to have more than one trustee administer it.
10. Does a trustee have to be bonded (see insured)?
11. What are some examples of what not to do as a trustee?
As taken from a prior post:
The trust drafter instructed the trustee, Bank of America, to not allow the trust bank account to exceed the maximum Federal Deposit Insurance Corporation amount. For whatever reason, Bank of America permitted the account to exceed the threshold amount. In particular, the FDIC amount was $10,000 (think 1960s) but the account balance at one time was $49,000. Consequently, Bank of America was held to have breached its fiduciary duty to follow the terms of the trust. Prob C §16000; Estate of Gilmaker (1962) 57 C2d 627.
Yes, a trustee can petition to appropriate court to seek assistance for the following. Prob C §17200.
- Determining questions of construction of a trust instrument;
- Determining the existence or nonexistence of any immunity, power, privilege, duty, or right;
- Determining the validity of a trust provision;
- Ascertaining beneficiaries and determining to whom property shall pass on termination of the trust, to the extent not specified in the instrument;
- Settling accounts and passing on the trustee's acts, including the exercise of discretionary powers;
- Instructing the trustee;
- Compelling the trustee to submit a report or account to the beneficiary under specified circumstances;
- Granting powers to the trustee;
- Fixing or allowing payment of the trustee's compensation or reviewing its reasonableness;
- Appointing or removing a trustee;
- Accepting the resignation of a trustee;
- Compelling redress of a breach of the trust;
- Modifying or terminating the trust;
- Combining or dividing trusts;
- Amending the trust to qualify a decedent's estate for the federal estate tax charitable deduction;
- Transferring a trust or trust property between jurisdictions;
- Transferring a supervised testamentary trust between counties;
- Removing a testamentary trust from court supervision;
Yes, a trustee can terminate a trust in certain instances. For example, if the trust's principal dips below $40,000, the trustee has the power to terminate the trust. Prob C § 15408(b).