Right to Know Trustee Fees

Bruce just received a notice that his mother’s trust is being finalized, but the attached accounting statement feels…opaque. He sees line items for “professional fees” and “administrative costs” but no real breakdown. He’s worried the trustee, his aunt Carol, is lining her pockets and doesn’t know how to get clarity without causing a family feud. He’s facing a potential loss of tens of thousands of dollars if these fees aren’t justified, and he’s desperate to understand his rights.

This is a surprisingly common scenario. As a California estate planning attorney and CPA with over 35 years of experience, I often see beneficiaries struggling to understand trustee fees. It’s not necessarily malicious – sometimes trustees simply aren’t transparent enough, or they don’t fully grasp the accounting requirements. But as a beneficiary, you absolutely have the right to know how your trust funds are being used, and to challenge unreasonable or undisclosed fees.

What are Trustee Fees, and are They Allowed?

Trustees are entitled to reasonable compensation for their services. However, “reasonable” is the key word. The trustee isn’t supposed to profit from the trust; they’re meant to administer it in the best interests of the beneficiaries. Fees must be justifiable and align with the trustee’s efforts and the complexity of the trust administration. This includes not only direct expenses but also the trustee’s compensation for their time and expertise.

How Can I Find Out What the Trustee is Charging?

California law gives beneficiaries a strong right to information. Specifically, Probate Code § 16060 & § 16062 outline the trustee’s duty to keep beneficiaries “reasonably informed” and to provide a formal accounting at least annually. This isn’t just a courtesy; it’s a legal obligation. If the accounting is vague or incomplete – like Bruce’s example – you have the right to request a more detailed breakdown. Don’t accept vague descriptions like “professional fees”; ask for invoices, receipts, and a clear explanation of what those fees cover.

What if the Trustee Refuses to Provide an Accounting?

If a trustee stonewalls your requests for information, you’re not powerless. Probate Code § 16060 & § 16062 also empowers you to petition the court to compel the trustee to provide an accounting. The court can order the trustee to open their books and provide a full, transparent accounting. Furthermore, if the trustee’s refusal is deemed unreasonable, the court can potentially surcharge them—meaning they could be held personally liable for legal fees incurred in obtaining the accounting.

What Kind of Fees are Common, and How Do I Evaluate Them?

Label: Professional Fees: This typically covers attorneys’ fees, accountants’ fees, and other professional services needed to administer the trust. These should be itemized and justifiable based on the work performed.
Label: Administrative Costs: These include expenses like bank fees, postage, appraisals, and court filing fees. These should be supported by documentation.
Label: Trustee Compensation: The trustee can charge a fee for their time, but it must be reasonable considering the size of the trust, the complexity of the administration, and the trustee’s experience. California Probate Code provides guidelines for calculating reasonable trustee compensation.

As a CPA, I have a unique perspective on these fees. Often, the biggest value I bring to trust administration – both as trustee and as an advisor to beneficiaries – is minimizing tax liability. A proper understanding of the “step-up in basis” for inherited assets, and accurate valuation of those assets, can save the trust (and the beneficiaries) significant capital gains taxes. These are savings that often far outweigh the trustee’s fees.

What if I Suspect the Trustee is Overcharging?

If you believe the trustee is charging excessive or unauthorized fees, you have several options. First, attempt to resolve the issue informally by communicating your concerns to the trustee in writing. If that fails, you can petition the court to review the trustee’s fees and potentially reduce them. You might need to hire an attorney to help you navigate this process and present a compelling case to the court.

Can I Remove a Trustee for Excessive Fees?

While excessive fees alone might not be enough to justify removing a trustee, they can be a contributing factor. Probate Code § 15642 allows beneficiaries to petition for a trustee’s removal for “hostility or lack of cooperation” that impairs the administration of the trust. If the trustee is consistently unresponsive to your requests for information, refuses to provide a clear accounting, and appears to be prioritizing their own financial gain over the beneficiaries’ interests, that could be grounds for removal. However, proving this can be challenging and requires strong evidence.

Protecting your inheritance requires vigilance. Don’t hesitate to ask questions, request documentation, and seek legal advice if you suspect something isn’t right.

What determines whether a California probate estate closes smoothly or turns into litigation?

California probate is designed to provide court-supervised transfer of property, yet cases often break down when authority is unclear, required steps are missed, or disputes arise over assets, notice, and fiduciary conduct. When the process is misunderstood, families can face avoidable delay, escalating conflict, and increased exposure to creditor issues, hearings, or litigation before the estate can close.

• Executor Authority: Secure letters testamentary if a will exists.
• Administrator Authority: Obtain letters of administration if there is no will.
• Identify Players: Clarify roles using who is involved in probate.

California probate is most manageable when authority is documented early, assets are classified correctly, and procedure is followed consistently from petition through closing. When the process is approached with realistic expectations about notice, claims, accounting, and dispute risk, the estate is more likely to move toward closure without avoidable conflict or delay.

Verified Authority on California Probate Alternatives

• Personal Property Affidavit ($208,850 Limit): California Probate Code § 13100 (Small Estate Affidavit)
  For deaths on or after April 1, 2025, the gross value threshold for using a Small Estate Affidavit has increased to $208,850. This procedure allows successors to collect cash, stocks, and personal items without court involvement. Warning: This total MUST NOT include assets held in joint tenancy, trust, or named beneficiaries (POD/TOD), but MUST generally include the value of all real property in the estate.
• Primary Residence Succession (AB 2016): California Probate Code § 13151 (Petition for Succession)
  You must distinguish between the Affidavit for Real Property of Small Value (strictly for property <$69,625) and AB 2016. Under AB 2016, a primary residence valued up to $750,000 qualifies for a ‘Petition for Succession’ rather than full probate. This is a court-filed Petition requiring a Judge’s Order, though it is significantly faster than full administration.
• Spousal Property Petition (Unlimited): California Probate Code § 13650 (Spousal Transfers)
  This powerful alternative allows for the transfer of unlimited assets to a surviving spouse or domestic partner without full probate administration. It applies to any asset passing to the spouse, whether characterized as community property, quasi-community property, or separate property (via Will).
• Trust Assets & The “Heggstad” Petition: California Probate Code § 850 (Heggstad Petition)
  If a decedent intended an asset to be in their trust (e.g., listed on Schedule A) but failed to retitle it (the “Oops” factor), a Section 850 Petition can obtain a court order confirming the asset as trust property. This “cures” the title defect and avoids opening a full probate estate for that single asset.
• Vacant Land & Timeshares: California Probate Code § 13200 (Real Property of Small Value)
  For real property interests valued at less than $69,625 (the 2025/2026 adjusted limit), successors can file an Affidavit for Real Property of Small Value with the Court Clerk and record a certified copy with the County Recorder. This completely bypasses the need for a hearing or judge’s order.
• Vehicle & Vessel Transfers (DMV): DMV Form REG 5 (Affidavit for Transfer Without Probate)
  Vehicles and vessels may be transferred outside of probate using the Affidavit for Transfer Without Probate (REG 5). Critically, the value of the vehicle is excluded from the $208,850 small estate calculation, meaning a high-value car does not disqualify an estate from using summary procedures.
• Digital Asset Access (RUFADAA): California Probate Code § 870 (RUFADAA)
  Even in summary administration, digital assets can be locked. Without specific RUFADAA language (Probate Code § 870) in your Will or Trust, service providers like Coinbase and Google can legally deny successors access to digital wallets and accounts, forcing a full probate just to retrieve them.