§ 2308 — Commissions of trustees, donees of power during minority and donees of powers in trust under wills of persons dying, or under lifetime tr...

New York § 2308

• Jurisdiction: New York
• Law SCP: Surrogate's Court Procedure
• Art. 23: Costs, Allowances and Commissions

Text

§ 2308. Commissions of trustees, donees of power during minority and\n donees of powers in trust under wills of persons dying, or\n under lifetime trusts created, on or before August 31, 1956\n 1. On the settlement of the account of any trustee or donee of power\nin trust under the will of a person dying on or before August 31, 1956,\nor under a lifetime trust established on or before August 31, 1956, the\ncourt must allow him or her his or her reasonable and necessary expenses\nactually paid by him or her and if he or she be an attorney of this\nstate and shall have rendered legal services in connection with his or\nher official duties, such compensation for his or her legal services as\nshall appear to the court to be just and reasonable and in addition\nthereto it must allow to the trustee or to the donee of the power in\ntrust for his or her services as trustee or donee of the power in trust\nthe following commissions from trust principal or property subject to\nthe power in trust:\n (a) For receiving principal or property subject to the power in trust\n (1) all sums of money constituting principal or property subject to\nthe power in trust not exceeding $2,000 at the rate of 3 per cent;\n (2) all additional sums of principal or property subject to the power\nin trust not exceeding $10,000 at the rate of 1 1/2 per cent;\n (3) all sums of principal or property subject to the power in trust\nabove $12,000 at the rate of 1 1/4 per cent; and\n (b) For paying out principal or property subject to the power in trust\nat the rate of 1 per cent.\n (c) Notwithstanding the provisions of section 8 of chapter 237 of the\nlaws of 1978, commissions provided by paragraph (a) of this subdivision\nfor receiving principal or property subject to the power in trust shall\nnot be allowed to a trustee or donee of a power in trust who qualifies\nto act as such on or after June 5, 1978, and shall not be allowed on\nadditions of property received on or after June 5, 1978; such\ncommissions on any increments in property that are payable by reason of\nany sale, exchange or liquidation of such property shall be allowed on\nthe lesser of (1) the amount of such increments on the date of sale,\nexchange or liquidation of such property and (2) the amount of such\nincrements on June 5, 1978; and such commissions on any increments in\nproperty that are payable by reason of any distribution of such property\nshall be allowed on the lesser of (1) the amount of such increments on\nthe date of distribution of such property and (2) the amount of such\nincrements on the effective date of this paragraph.\n 2. In addition to the commission allowed by subdivision one a trustee\nor a donee of a power in trust shall be entitled to annual commissions\nat the following rates:\n (a) $10.50 per $1,000 or major fraction thereof on the first $400,000\nof principal or property subject to the power in trust;\n (b) $4.50 per $1,000 or major fraction thereof on the next $600,000 of\nprincipal or property subject to the power in trust; and\n (c) $3.00 per $1,000 or major fraction thereof on all additional\nprincipal or property subject to the power in trust.\n Such annual commissions shall be computed either on the value of the\nprincipal of the trust or of the property subject to the power in trust\nat the end of the period for which the commissions are payable or, at\nthe option of the trustee or of the donee of the power in trust, on the\nvalue of the principal of the trust or of the property subject to the\npower in trust at the beginning of such period, provided that the option\nelected by the trustee or of the donee of the power in trust for the\nfirst period for which such commissions are payable shall be used during\nthe continuance of the trust or of the power in trust and shall be\nbinding on any successor or substitute trustee or trustees or successor\nor substitute donees of the power in trust. In the case of a trust or\npower in trust which prior to January 1, 1994 computed annual\ncommissions on the basis of a 12 month period (other than a calendar\nyear), the trustee's or donee's prior election of such 12 month period\nshall be binding unless, prior to January 1, 1995, the trustee or donee\nmakes a new election to compute annual commissions on the basis of a\ncalendar year either on the value of the principal of the trust or of\nthe property subject to the power in trust at the end of, or at the\noption of the trustee or donee of the power in trust at the beginning\nof, the calendar year for which the commissions were payable, which new\nelection shall be used during the remaining continuance of the trust or\nof the power in trust and shall be binding on any successor or\nsubstitute trustee or trustees or donee or donees of the power in trust.\nThe computation shall be made on the basis of a 12 month period but the\namount so computed payable to a trustee or donee of a power in trust\nshall be proportionately reduced or increased for any payments made in\npartial distribution of the trust or of the property subject to the\npower in trust or receipt of any additional property into the trust or\nby the donee of a power in trust within such period and shall be\nproportionately reduced in any period for which such commissions are\npayable to the trustee or donee of the power in trust if the period is\nless than 12 months. For the purpose of computing the annual commissions\nthe value of any principal asset when received by the trust or by the\ndonee of a power in trust shall be the presumptive value of the asset at\nthe beginning and end of the period for which such commissions are\npayable. In computing the value of the principal of the trust or of the\nproperty subject to the power in trust the trustee or the donee of the\npower in trust may use the presumptive value in respect of any principal\nasset or may use the actual value of the asset. On the settlement of the\naccount of the trustee or of the donee of a power in trust any person\ninterested may dispute the amount of any commission claimed or retained.\nThe burden of proving that the actual value of any principal asset\ndiffers from its presumptive value is upon the trustee, the donee of the\npower in trust or other person claiming the difference.\n 3. Unless the will or lifetime trust instrument otherwise explicitly\nprovides, the annual commissions allowed by this section shall be\npayable one-third from the income of the trust and two-thirds from the\nprincipal of the trust. However, in the case of a trust whose definition\nof income is governed by section 11-2.4 of the estates, powers and\ntrusts law, such annual commissions shall be payable from the corpus of\nany such trust after allowance for the annuity or unitrust amounts and\nshall not be payable out of such annuity or unitrust amount and shall\nnot be payable out of such unitrust amount.\n 4. The commissions allowed by subdivision 2 may be retained by a\ntrustee or donee of a power in trust provided he or she furnishes\nannually as of a date not more than 30 days prior to the end of the\ntrust year selected by the trustee or the calendar year, to each\nbeneficiary currently receiving income, and to any other beneficiary\ninterested in the income and to any person interested in the principal\nof the trust who shall make a demand therefor or to the beneficiary of\nthe power in trust who shall make a demand therefor, a statement showing\nthe principal assets or the property subject to the power in trust on\nhand on that date, and at least annually or more frequently if the\ntrustee or donee of a power in trust so elects, a statement showing all\nhis or her receipts of income and principal or property subject to the\npower in trust during the period with respect to which the statement is\nrendered including the amount of any commissions retained and the basis\nupon which the commissions were computed. A trustee or donee of a power\nin trust shall not be deemed to have waived any commissions by reason of\nhis or her failure to retain them at the time when he or she becomes\nentitled thereto; provided however that commissions from income for any\ngiven trust or calendar year shall be allowed and retained only from\nincome derived from the trust or from the property subject to the power\nin trust during that year and shall not be supplied from income on hand\nin respect of any other trust or calendar year. If a beneficiary\nreceiving income does not desire to be furnished with any such statement\nhis or her advice to the trustee or to the donee of the power in trust\nto that effect in writing shall thereafter excuse the trustee or donee\nof the power in trust from furnishing such statement to the beneficiary\nunless and until the beneficiary requests such annual statements from\nthe trustee or donee of the power in trust.\n 5. (a) During the continuance of a trust created solely for public,\nreligious, charitable, scientific, literary, educational or fraternal\nuses and during the period of continuance of such a trust established\nafter the termination of a life use or uses the trustee shall be\nentitled to and may retain annual commissions according to the terms\nspecified in subdivision 2 of this section, but only to the extent of 80\npercent of the rates stated therein. Notwithstanding any other provision\nof law, with respect to any portion of such trust which exceeds a\nprincipal value of twenty million dollars, the trustee may only take\nannual commissions to the extent of 50 percent of the rate specified in\nparagraph (c) of subdivision 2 of this section.\n (b) In the case of a trust described in paragraph (a) of this\nsubdivision, a trustee shall not be entitled to any commission from\nprincipal as specified in subdivision 1 of this section for paying out\nprincipal.\n (c) In the case of such a trust which continues after the termination\nof a life use or uses the trustee for the period of the measuring life\nor lives shall be entitled to commissions from income and principal at\nthe rates and according to the terms otherwise provided in this section,\nexcept that he or she shall not be entitled to any commissions for\npaying out any amount of principal.\n 6. (a) If the gross value of the principal of the trust or of the\nproperty subject to the power in trust accounted for amounts to $400,000\nor more and there is more than 1 trustee or donee of the power in trust,\neach trustee or donee of the power in trust is entitled to the full\ncompensation for receiving and paying out principal or property subject\nto the power in trust allowed herein to a sole trustee or donee of the\npower in trust unless there are more than 3, in which case the\ncompensation to which 3 would be entitled must be apportioned among the\ntrustees or donees of the power in trust according to the services\nrendered by them respectively, unless the trustees or donees of the\npower in trust shall have agreed in writing among themselves to a\ndifferent apportionment which, however, shall not provide for more than\none full commission for any one of them. If the gross value of the\nprincipal of the trust or of the property subject to the power in trust\naccounted for is:\n (i) less than $100,000 and there is more than 1 trustee or donee of\nthe power in trust the full compensation for receiving and paying out\nprincipal or property subject to the power in trust allowed herein to a\nsole trustee or donee of the power in trust must be apportioned among\nthem according to the services rendered by them respectively, or\n (ii) $100,000 or more but less than $400,000, each trustee or donee of\nthe power in trust is entitled to the full compensation for receiving\nand paying out principal or property subject to the power in trust\nallowed pursuant to this subdivision to a sole trustee or donee of the\npower in trust unless there are more than 2 trustees or donees of the\npower in trust in which case the full compensation for paying out\nprincipal or property subject to the power in trust allowed pursuant to\nthis subdivision to 2 trustees or donees of the power in trust must be\napportioned among them according to the services rendered by them\nrespectively,\nunless the trustees or donees of the power in trust shall have agreed in\nwriting between or among themselves to a different apportionment which,\nhowever, shall not provide for more than one full commission for any one\nof them.\n (b) If the value of the principal of the trust or of the property\nsubject to the power in trust for the purpose of computing the annual\ncommissions allowed by subdivision 2 amounts to $400,000 or more and\nthere is more than one trustee or donee of the power in trust, each\ntrustee or donee of the power in trust is entitled to the full annual\ncommission allowed herein to a sole trustee or donee of the power in\ntrust unless there are more than 3, in which case the annual commissions\nto which 3 would be entitled must be apportioned among the trustees or\ndonees of the power in trust according to the services rendered by them\nrespectively, unless the trustees or donees of the power in trust shall\nhave agreed in writing among themselves to a different apportionment\nwhich, however, shall not provide for more than one full annual\ncommission for any one of them. If the value of the principal or of the\nproperty subject to the power in trust for the purpose of computing the\nannual commission allowed by subdivision 2 amounts to:\n (i) less than $100,000 and there is more than 1 trustee or donee of\nthe power in trust, the annual commissions from income and the annual\ncommission allowed herein to a sole trustee or donee of the power in\ntrust must be apportioned among the trustees or donee of the power in\ntrust according to the services rendered by them respectively, or\n (ii) $100,000 or more but less than $400,000, each trustee or donee of\nthe power in trust is entitled to the full annual commission allowed\npursuant to this subdivision to a sole trustee or donee of the power in\ntrust unless there are more than 2 trustees or donees of the power in\ntrust in which case the full annual commissions allowed pursuant to this\nsubdivision to 2 trustees or donees of the power in trust must be\napportioned among them according to the services rendered by them\nrespectively,\nunless the trustees or donees of the power in trust shall have agreed in\nwriting between or among themselves to a different apportionment which,\nhowever, shall not provide for more than one full annual commission for\nany one of them. However, if from a trust or from property subject to a\npower in trust having a value of $400,000 or more, or if from a trust or\nfrom property subject to a power in trust having a value of $100,000 or\nmore but less than $400,000, as the case may be, at the beginning of a\ntrust year or of the calendar year in the case of a power in trust, any\npayments in partial distribution of the trust or of the property subject\nto the power in trust shall be made during the trust or calendar year so\nas to reduce the trust or of the property subject to the power in trust\nto a value of less than $400,000 or $100,000, as the case may be, at the\nend of the trust or calendar year, then the annual commission allowed\nherein shall, on a proportionate basis, be those allowed to a trustee of\na trust or to donees of a power in trust over property having a value of\n$400,000 or more, of a trust or to donees of a power in trust over\nproperty having a value of $100,000 or more but less than $400,000, as\nthe case may be, for the period from the beginning of the trust or\ncalendar year to the date of the distribution and shall, on a\nproportionate basis, be those allowed to trustees of a trust or to\ndonees of a power in trust over property having a value of either\n$100,000 or more but less than $400,000 or less than $100,000, as the\ncase may be, for the remainder of the trust or calendar year and the\npart of such commissions payable from principal and computed from the\nbeginning of the trust or calendar year to the date of distribution\nshall be charged ratably to the property remaining in the trust and to\nthe property distributed from the trust on the basis of their respective\nvalues. Further, if during a trust year or a calendar year in the case\nof power in trust additional property shall be received into a trust\nwhich had a value of less than $100,000 or by a donee of a power in\ntrust the property subject to which had a value of less than $100,000,\nor into a trust which had a value of $100,000 or more but less than\n$400,000 or by a donee of a power in trust the property subject to which\nhad a value of $100,000 or more but less than $400,000, as the case may\nbe, at the beginning of the trust or calendar year so that because of\nthe additional property the trust or the property subject to the power\nin trust shall have a value of $100,000 or more or of $400,000 or more,\nas the case may be, at the end of the trust or calendar year, then the\nannual commission allowed herein to the trustee or to the donee of the\npower in trust shall, on a proportionate basis, be those allowed to\ntrustees of a trust or to donees of a power in trust over property\nhaving a value of less than $100,000, or to trustees of a trust or to\ndonees of the power in trust having a value of $100,000 or more but less\nthan $400,000, as the case may be, for the period from the beginning of\nthe trust or calendar year to the date of the receipt of the additional\nproperty and shall, on a proportionate basis, be those allowed to\ntrustees of a trust or to donees of a power in trust over property\nhaving a value of $100,000 or more but less than $400,000, or to\ntrustees of a trust or to donees of a power in trust over property\nhaving $400,000 or more, as the case may be, for the remainder of the\ntrust or calendar year.\n 7. Where a trustee or donee of a power in trust is for any reason\nentitled or required to collect the rents of and manage real property\nthe net amount of rents collected and not the gross amount shall be used\nin making computation of commissions allowed by subdivision 5 hereof and\nin addition to the commissions herein provided he or she shall be\nallowed and may retain for such services 6 per cent of the gross rents\ncollected, but there shall be only 1 such additional commission\nregardless of the number of trustees or donees of the power in trust. If\nthere are 2 or more trustees or donees of the power in trust the\nadditional commission herein provided must be apportioned among them\naccording to the services rendered by them respectively unless they\nshall have agreed in writing among themselves to a different\napportionment.\n 8. A trustee who prior to September 1, 1966 shall have received the\nmaximum amount of commissions on principal permitted by subdivision 8 of\nsection 285-a of the surrogate's court act as that subdivision existed\nprior to that date, shall not be entitled to annual principal\ncommissions for the period from the date when he or she shall receive\nsuch maximum and September 1, 1966, but shall be entitled to receive\ncommissions from and after September 1, 1966 at the rates and in the\nmanner provided in this section. A trustee who has become entitled to\nannual principal commissions pursuant to section 285-a of the\nsurrogate's court act as it existed prior to September 1, 1966, but has\nnot received them, may receive an amount of commissions not in excess of\nthe amount he or she would have been entitled to if he or she had taken\nsuch commissions, and be entitled to receive in addition commissions\nfrom and after September 1, 1966 at the rates and in the manner provided\nin that section.\n 9. A trustee who has been acting prior to July 1, 1956 shall be\nentitled to have commissions on principal and income theretofore\nreceived by him or her computed, allowed and paid under the methods and\nat the rates set forth herein, except as follows:\n (a) If prior to July 1, 1956 a trustee has been allowed or has\nretained commissions for receiving and paying out or for distributing\nany item of principal he or she shall be entitled to no further\ncommissions on the item.\n (b) If prior to July 1, 1956 a trustee has been allowed or retained\ncommissions on any item of principal received but not paid out or\ndistributed by him or her he or she shall be entitled to no further\ncommissions for receiving the item.\n (c) Any trustee who became entitled to an annual principal commission\nunder subdivision 1 (b) of section 285-a of the surrogate's court act as\nit existed prior to April 1, 1948 and who has not retained such\ncommission may retain an amount equal to one-half of such annual\nprincipal commission. A trustee who because of the provisions of\nsubdivision 2 of section 285-a of the surrogate's court act as it\nexisted prior to April 1, 1948 either was not entitled to retain an\nannual principal commission under subdivision 1 (b) thereof or was\nrequired to credit such annual principal commission against his or her\ncommission for receiving principal, may retain an amount equal to 1/2 of\nsuch annual principal commission. If a trustee has been allowed by\ndecree or has retained any such annual principal commission one-half the\namount thereof shall be deducted from the amount of commissions to which\nthe trustee would otherwise be entitled under the provisions of\nsubdivision 1.\n (d) The annual principal commissions allowed by subdivision 3 of this\nsection as it existed on September 1, 1967 shall not be allowed or\nretained in respect of any trust year ending prior to April 1, 1948, but\nfor any trust year ending on or after April 1, 1948 and prior to July 1,\n1956, the annual principal commission which may be allowed or retained\nshall be computed at the rates in effect on the date such trust year\nended.\n (e) If prior to July 1, 1956 a trustee has been allowed or has\nretained commissions on any item of income received and paid out by him\nor her prior to September 1, 1943 or on any item of income collected by\nhim or her subsequent to September 1, 1943 he or she shall be entitled\nto no further commission on the item.\n 10. The value of any property to be determined in such manner as\ndirected by the court and the increment thereof received, distributed or\ndelivered shall be considered as money in making computation of\ncommissions. Whenever any portion of the dividends, interests or rents\npayable to a trustee or donee of a power in trust is required by any law\nof the United States or other governmental unit to be withheld by the\nperson paying it for income tax purposes, the amount so withheld shall\nbe deemed to have been collected.\n 11. Where the will provides a specific compensation to a trustee or\ndonee of a power in trust he or she is not entitled to any other\nallowances for his or her services.\n 12. If a trustee of a trust is authorized or required by the terms of\nthe will to accumulate income for any purpose permitted by law, any\nincome so accumulated which is not added to principal of the trust shall\nbe deemed a separate trust for purposes of this subdivision and the\ntrustee shall be entitled to commissions in respect thereof at the rates\nand according to the terms and provisions of subdivisions 1, 2 and 5 of\nthis section as though, for purposes of computing commissions of the\ntrustee, income so accumulated was principal.\n 13. For the purposes of this section, the term "trustee" shall mean\nany trustee who is not a corporate trustee and the term "donee of a\npower in trust" shall mean any such donee including a donee of a power\nduring minority who is not a corporate fiduciary of a donee of a power\nduring minority with the rights and duties of a guardian under section\n1714 of this chapter provided, however, that as used in subdivision 6 of\nthis section, the term trustee shall include a corporate trustee.\n