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Question:

I served as trustee and POA for a friend who was ill for over 4 years. The estimated assets were approximately $2 million at the time I assumed responsibilities for her 12 registered purebred horses and 4 purebred dogs (she was a breeder of both). Although I own my own home, it was impossible to manage the farm and animals remotely to keep everything secure and healthy. I did the majority of the hands-on care of all the animals with supplemental help. This included baling hay, feeding the animals daily, administering medications, turning the horses out daily, and bedding in their stalls at night. I handled all of her bills, finances, insurance claims, in addition to interacting with the CPA to file taxes and a financial advisor. Where do I begin to determine what is a reasonable fee for the administration of the trust, POA duties, as well as animal caregiver and overseeing the maintenance of the farm? The trust was boilerplate, over 100 pages, and a disaster. My compensation is not clear per the trust. The beneficiaries feel I should not be paid at all.

Response:

This is a very difficult situation. You deserve to be compensated, but the question is how much. A big part of the problem is that you sit on both sides of the business deal. As trustee and agent under the durable power of attorney, you’re the payor. As the person who did so much work, you’re the payee. As a result, there’s an inherent conflict of interest. While it might have been more expensive, it would have been better to have hired someone else to do all the hands-on work. Or, if your friend was competent over those four years, it would have been better if she had paid you for your services on an ongoing basis. If she was not competent, you could have paid yourself, at least for the hands-on work and for acting as trustee. Without an agreement ahead of time, you might not be entitled to compensation for acting under your friend’s durable power of attorney.

But that’s all hindsight. Undoubtedly, you didn’t expect your duties to last for four years. So what do you do now? First, you’re entitled to representation and the fees for your lawyer should come out of the trust. So, that’s the first step. Get a lawyer. Second, work out with your lawyer and perhaps with the accountant what you all think would be fair compensation for the work you provided—the more documentation, the better. Third, forward the proposal to the beneficiaries. If they don’t accept it, suggest mediation. Fourth, if they’re totally recalcitrant, at least in my state, we would go to the probate court to ask the judge for instructions. Both sides would then present their arguments and evidence and then the judge would decide.

Another approach might be to sue the trust for compensation, but that might be hard for you to do unless you resigned as trustee. In any case, your lawyer can advise you on the best strategy given your circumstances and your state’s laws and practices.

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