What Should I do About a Trustee Who is Overcharging Me?

 In Special Needs Planning, Trustee

Question:

I have a special needs trust holding about $200,000. My trustee is charging me attorney fees every month from $136 to $380 an hour. My SSI check is just $550 a month. In the past 12 months my trustee and her attorney partner on the average have charged me approximately $900 a month.  I asked why am I paying for attorney fees every month?  Now she is being vague with my questions and starting long email treads at $190 a hour. She refuses to buy me a reliable car that will last me for the rest of my driving years . And she says, in so many words, I not deserve a good reliable car. What should I do besides hiring another attorney at $400 an hour?

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Response:

You face a dilemma not unusual with smaller trusts. The work a trustee must do with a small trust may be no different than the work she does with larger trusts, but if the fee is the same it can be unaffordable for a smaller trust. For instance, in your case, if your trustee’s fees total $10,000 a year, that would be 5 percent of your trust, but only 1 percent of a trust holding $1 million. A trustee’s fee of 5 percent will begin to deplete the trust’s principal, beginning a downward spiral that could ultimately consume the trust. A $10,000 annual fee on a $100,000 trust would constitute 10 percent of the trust.

Your second issue has to do with your disagreement with your trustee’s judgment. My guess is that she’s not saying that you don’t “deserve” a reliable car but that you can’t afford one given the size of your trust. These issues — the level of trustee fees and affordability of a new car — overlap since if the trust weren’t spending so much on trustee fees it could better afford a new car and if you weren’t arguing with the trustee about the car, the trustee fees would be lower.

Here’s my advice: Contact your trustee and her office as little as possible, since doing so is expensive. Don’t hire another lawyer to try to remove your current trustee since that’s also expensive. In addition, it’s hard to get a court to remove a trustee on a judgment issue where her decision is not totally unreasonable. But you could start looking for another trustee with whom you would see more eye to eye. My guess is that your current trustee would willingly give up her post to another qualified trustee.

Comments
  • Tom Farrell
    Reply

    We have a trustee of a SNT who has over $100,000.00 in charges for one year! This to me sounds more than excessive! The total value of the trust including the home in it is just over $1,000.000.00. It used to have more then $1,200.000.00 in it.

    This same trustee has stated that the property is hers and has tried to evict the only beneficiary from the home that was in the trust for his lifetime beneficial use and was signed over to the trustee.

    That trustee had stated that it was a SNT and that housing was not supposed to be supplied by the trust? He has no SSI payments coming in and the trustee has held the trust for only two years with her being the second successor trustee.

    She served him with a 60 day notice to vacate the property and offered him no other housing, When he did not move onto the streets as that was his only option at the time , She filed a unlawful detainer.

    This offered the trust no benefit or did it provide anything in the best interest of the beneficiary’s interest as she is billing the trust for all the connected fees and even asked to be paid rent and penalties for his not moving and stated it was because of malice that he stayed!

    This is a professional trustee! The court documents used were not entirely truthful or did they give the full and correct information with the three times she has filed to remove him with the courts The reasons the unlawful detainer can be filed that she used in the first complaint were listed in the third amended complaint as not being in effect listed by the number proving that the reason for her being allowed to even file the unlawful detainer as being wrong and unjustified.

    She has dropped the case yet feels that she is not responsible for the legal fees and related charges. Is there a code that will force the trustee to be accountable for the charges related to a case filed by her that were later dropped?

    I am the trust protector and have dismissed her after she filed the first complaint, She then filed two more before deciding to drop the case! Stating that she would never have taken the trust over had she known a trust protector existed! I think that alone speaks volumes about the trustee’s integrity!

    she has now filed to have me removed as the trust protector as I too live at the address of the property in the trust. My brother who named me to be the trust protector has had a stroke that has left him needing 24 hour care as he can no longer take care of him self on a daily basis. The aid he get’s will not cover a live in care giver and the trustee has never provided any services what so ever!

    The most that she has been involved with the trust has been the eviction process! The property is paid for and no expenses are charged to the trust as I pay for all the materials and do all the work needed around the house from painting the house to replacing the water heater. They do complain that I do any of the work then tells me I am sponging off my brother!

    He can not maintain the house or even balance a check book, He has almost no motor skills left and only can shuffle around with a walker to get around! He needs help getting dressed and getting out of bed! He can not provide for himself on a daily basis and lost his SSI because of the trustee’s lack of concern in clearing up a issue that the former trustee of the trust that set this up for him had created.

    Two years in a row the same charges were submitted by the former trustee and the SS Administrative office needed records to find out what happened. After making two phone calls that did not go through according to the trustee’s accounting of her actions were the only attempts listed in this matter!

    If you think a trustee be it a family member or a licence trustee is going to be a benefit to your loved ones then think again. As bad as what this trustee has done is not even worse than what the family member has done that included three disabled family members that of whom she has taken advantage of and with a cost to the trust in defending her actions of more than $500.000.00!

    In both cases the trustee uses the trust funds to battle even when the trustee should have never taken the steeps that were taken. Even with the courts not helping the attorneys are the only ones who will get anything from the trust and they can be even worse than the trustees you are complaining about!

    If you ask me the probate court is the way to go because then at least the court will have to be answered to instead of you having to pay for every time the trustee did something wrong. It can be in the thousands of dollars that you have been shorted but the cost of recovery will be even more!

    That is the worse the trustee the more it will cost you! It cost me hundreds of thousands of dollars to try to get re leaf from the mess the trustee had done by allowing her attorney husband to run the trust whom she also signed over the POA to illegally!

    He altered trust documents and even evidence submitted to the court! Tampered with a witness and did not report all of the money and deeds to the trust being more than $2,000,000.00 short of the real amount in the trust.

    He knew how to make it as costly as possible and stated that he will do so if I hired a attorney to file a case against him! He was true to his word in only that statement! He perverted the courts by not being truthful in almost every detail and did so many things to add to the cost that the stack of documents on the judges desk was not less than a foot high! One of the judges even stated that he did not want that to end up on his desk!

    It was made to be as complicated as possible and his 5 attorneys that were hired to defend him and the trustee were just as bad as he was and would follow what ever he said including paying his legal fees from the trust as the same attorneys were the trust attorneys!

    To say if it can go wrong will is a understatement and know that the court will not help you get to the truth and if you hire a POS attorney like I ended up with it will only break you and take longer than the Probate court would have taken and cost you way more than it would have had you not created a trust!

    Mind you this trustee that was picked was trusted by everyone, No one had any idea about what she will turn into after being the trustee. She was so angry at our mother for making her trustee and said the worst things about her after she passed! She was very upset that our mother did not include her son in the trust and was even more up set that she will have to share her part with her son!

    Out of five kids only two grand children were born. Her son was spoiled right from the day he was born and was given more money than any of us ever had! But that was not enough! She made up reasons for acting like she did! She was all of a sudden angry with everyone and everything! Turned it all over to her real estate attorney of a husband who after earning $500.00 an hour could not retire at 62!

    Yet thought he was the right person to call the trust adviser! He was fired from the place he was a part owner of for over charging his own clients! He learned all kinds of dirty moves and used then all to protect himself while claiming no accountability for any of his actions.

    They had money but it was not enough! So they took advantage of the three disabled members of the family and my self who also has medical problems like cancer. That was one of his defenses by the way! About how it was not a problem to me as it was to anyone else, It was only life threatening to everyone but me! He really stated this in the opening statement as part of his defense!

    The rest was that he didn’t do it and although he was the trust adviser that he was not accountable because he was not being paid so it was the trustee’s fault for taking his advise! It took him no time to throw her under the buss as soon as the case was filed!

    It gets better! The court set the dates one month apart and it was going to take weeks for it to be heard thank to the attorneys that were involved! So the better part of a year would have passed before it was even done that is after two years of waiting to get to trial!

    After two half days of court a mistrial was called because the court did not give enough time to allow for the trial.

    Trustee’s and attorneys can be the death of you when all your trying to do is to keep your rights in tact! To get the trustee to follow the trust instructions, To get what you have been cheated from by the trustee and to keep them from doing you harm!

    To read about the rights you have and how the courts are there to help you…. It comes at a price that you will not recover! I have not even got to what they did after a brother passed away and how the trustee was trying to change the way he wanted his money distributed from half going to my disabled brother to 40% of it going to her and her son!

    Even being careful about what you think is covered and picking the right trustee the best way to handle it may be by not having anyone distribute your money for you if you want it to get to who you want it to go to! us a POD account instead and everything will end up in that persons account cash wise! and use the joint tenancy deeds for property! that way you avoid all the head aches and was of money that will surly follow!

    You don’t need all the attorneys fees and trustees fees or the chance of another dirty trustee and another dirty attorney! Save your loved ones a load of problems and leave it to them using the two ways mentioned! You wont need anything other than that!

    Do not trust anyone with anything if they are not the ones to get it! Many trusts have been made and when it came time to pay went to the wrong person! People can change over night trust me on this! You have only the short version of events and have not heard the facts that are involved with this as it is only the tip of the iceberg that has been mentioned! It has been 7 years that this started and still is ongoing!

    Only now finding that the trustee had altered the SNT as well and that two versions of it are being used!

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