As an Orange County special needs planning lawyer, I often help parents set up a supplemental or Special Needs Trust in California to protect their child’s resources and inheritance for the future.
When crafting this important document, the attorney will also help their clients choose a trustee who will be charged with overseeing and managing the funds in the trust throughout the child’s life. The trust will generally include language about how the trustee is to be compensated for taking on this important role.
Even if a fee is not mentioned in the trust language itself, the trustee is still entitled to payment if desired. There are several factors that should go into determining a suitable fee, including the complexity of the trust and the ongoing responsibilities that will be required to manage the incapacitated adult’s affairs.
Essentially, the more tasks a trustee has to perform, or the more complex the tasks, the more appropriate payment becomes. The trustee will be responsible for tracking their time, along with the service, in order to determine a fair rate. A qualified special needs attorney here in Orange County can provide feedback about what a fair rate may be based on the specifics of the plan.
Occasionally, the trustee will need to pay for a good or service out of pocket. In this case, the Special Needs Trust will reimburse them, provided they show a receipt. The reimbursement is not considered part of the fee; instead, the fee is considered income and taxed as such. On the trust’s end, the fee is a tax deduction.
Again, each plan is different, and it’s important to talk to an attorney about the specifics of what to expect if you have been appointed to serve as trustee of a Special Needs Trust in. Of course, if you have specific questions about compensation or your roles and responsibilities in overseeing a loved one’s Special Needs Trust in California, we invite you to call our Newport Beach law firm at (949) 260-1400 to schedule a consultation.