Trying to decide my take on the following.
Sibling is trustee of parent’s estate, which was recently disbursed.
Sibling has been well compensated for all trustee work.
Sibling awarded self $90,000, 2% of the estate, as a trustee fee, in addition to regular pay.
I am told this trustee fee is legally justifiable.
My question is how common this arrangement is.
does some quick maths
Is your sibling single? (Gender is irrelevant)
Thinly veiled soon to be a millionaire brag.
Or…
My elder sister, the trustee of my mother’s estate, charged £0 apart from cover for travel and long distance phone calls to the solicitor (exactly as I would also have done in her shoes). Make of that what you will.
Shame on you guys.
My condolences on the loss of your parents.
(of course I did the calculation)
IAMNAL but if a fee is contemplated in the trust documents, you are not likely to prevail in court. Is the trust still in probate? You might be able to tie it up and leverage a delay, but I don’t know, seems like 2% is a fee you will pay not to deal with your sibling anymore.
Generally speaking, the trustee has wide latitude in trust law and trust documents.
The jurisdiction probably matters in terms of what is common and what is permissible. Certainly where I live it is very common for: a) people to take too little in exchange for being the trustee, which is a HUGE pain in the ass; and b) everyone else with an entitlement to the estate getting mad at the trustee for “stealing” from the estate.
Really though, forget about it. It’s hard to believe that the 2% fee is a big deal. You must be mad at your sibling for other things - maybe that they were chosen to be trustee. Yeah, $90k is a tremendous amount of money, but still, it’s just 2%.
Regardless of the amount of money relative to the size of the estate, I would be super-pissed if the trustee took both a fixed fee and regular pay for the hours spent handling the estate. Take one or the other imo.
Well yes, for one, the attempt to slip it past the rest of us, and secrecy about previous compensation. But the amount is significant, to me. Shocking, in fact.
And for those of you guessing the value of the estate to me, you did not figure in the number of siblings. 
Counterpoint: Sibling is about to become a millionaire and is greedy enough to siphon $90K from the pool.
In my limited experience, these kinds of disagreements happen ~all the time. My parents asked me to be trustee but I refused, as long as they didn’t have the evil sister do it. If you can’t negotiate it among yourselves, consider that it might be worth it to cut the bastard loose.
That type of fee is pretty common. It’s a lot of work being trustee especially for an estate that large. My parents will award me 3% for doing it. It won’t be anywhere near $90k though. More like $5k. lol.
I don’t think it’s common to double-dip, though.
Option A: Track your hours and expenses on handling the estate. Bill the estate for those amounts using some reasonable hourly wage.
Option B: Take a flat fee (perhaps calculated as a % of the estate)
In this case, it sounds like OP’s sibling is charging BOTH, which I think is obscene.
Right that is true. It’s either or.
An executor settles an estate. A trustee manages a trust. Which is it?
Both.
Well you need to clarify exactly what the fees are for.
Taking 2% as an executor’s fee is high but not unheard of. Executor fees have to be approved by the probate court so you will have no luck challenging them. Taking 2% a year to serve as trustee is very high and will, over time, deplete the trust. You have to read the trust document to see whether it is permitted. Most trusts say “compensation in line with customary pay for such services” or something similar. For a $4.5 million trust, its worth consulting an experienced trusts and estates lawyer.
Note that there is no “trust police.” A bad trustee is a really big problem because it costs a fortune to try to get them removed and they almost always can use your trust principal to fight the removal. But if they deplete the trust and spend the money, you have no recourse at all.
