Does a non-professional, non-institutional trustee of a decedent’s estate have to keep track of hours in order to determine what is a “reasonable” fee?

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Does a non-professional, non-institutional trustee of a decedent’s estate have to keep track of hours in order to determine what is a “reasonable” fee?

Or would a percentage of the value of the Trust be acceptable, such as is charged by banks, etc. to serve as trustee? The law itself specifies only that the fee must be reasonable. The trustee of our mother’s estate did not keep track of hours, and we all know the trustee did a lot of work, but how do we determine it is reasonable without knowing the hours?

Asked on August 10, 2014 under Estate Planning, Michigan

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

The trustee should have kept note of the time spent on the tasks involved but the court can infer time depending on the complexities of the services performed.  You are correct that the Michigan statute relating to this matter is vague, but it is my understanding that case law in your state gives a list of factors that the court will look at to determine the reasonableness of the fee. You may need to ask the trustee to reconstruct time sheets. Sitting with an attorney that you trust to go over the tasks that the trustee performed and the time that could be assumed from doing them is also an option. The Michigan courts will accept an agreed upon fee by all parties with out looking in to the details.  I will give you a list of the factors here to help.  Good luck. 

(1) size of trust,

(2) responsibility involved,

(3) character of the work involved,

(4) results achieved,

(5) knowledge, skill, and judgment required and used,

(6) time and services required,

(7) manner and promptness in performing its duties and responsibilities,

(8) unusual skill or experience of the trustee,

(9) fidelity or disloyalty of the trustee,

(10) amount of risk,

(11) custom in the community for allowances, and

(12) estimate of the trustee of the value of his services.

 

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