§ 2309 — Commissions of trustees, of donees of powers during minority and of donees of powers in trust under wills of persons dying, or lifetime t...

New York § 2309

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

Text

§ 2309. Commissions of trustees, of donees of powers during minority and\n of donees of powers in trust under wills of persons dying, or\n lifetime trusts established, after August 31, 1956\n 1. On the settlement of the account of any trustee or donee of a power\nin trust under the will of a person dying after August 31, 1956, or\nunder a lifetime trust established after August 31, 1956, the court must\nallow to 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 donee of a power in trust for\nhis or her services as trustee or donee of a power in trust a commission\nfrom principal or from the property subject to the power in trust, for\npaying out all sums of money constituting principal or property subject\nto the power in trust at the rate of 1 per cent.\n 2. In addition to the commission allowed by subdivision 1 hereof a\ntrustee or donee of a power in trust shall be entitled to annual\ncommissions at 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.\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 donee of the power in trust, on the value\nof the principal of the trust or of the property subject to the power in\ntrust at the beginning of such period, provided that the option elected\nby the trustee or donee of the power in trust for the first period for\nwhich such commissions are payable shall be used during the continuance\nof the trust or of the power in trust and shall be binding on any\nsuccessor or substitute trustee or trustees, donee or donees. In the\ncase of a 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 prior election of such 12 month period shall be\nbinding unless, prior to January 1, 1995, the trustee makes a new\nelection to compute annual commissions on the basis of a calendar year\neither on the value of the principal of the trust at the end of, or at\nthe option of the trustee at the beginning of, the calendar year for\nwhich the commissions were payable, which new election shall be used\nduring the remaining continuance of the trust and shall be binding on\nany successor or substitute trustee or trustees. The computation shall\nbe made on the basis of a 12-month period but the amount so computed\npayable to a trustee shall be proportionately reduced or increased for\nany payments made in partial distribution of the trust or the receipt of\nany additional property into the trust within such period and shall be\nproportionately reduced in any period for which such commissions are\npayable to the trustee if the period is less than 12 months. For the\npurpose of computing the annual commissions the value of any principal\nasset when received by the trust or donee of a power in trust shall be\nthe presumptive value of the asset at the beginning and end of the\nperiod for which such commissions are payable. In computing the value of\nthe principal of the trust or of the property subject to the power in\ntrust the trustee or donee of the power in trust may use the presumptive\nvalue in respect of any principal asset or may use the actual value of\nthe asset. On the settlement of the account of the trustee or donee of a\npower in trust any person interested may dispute the amount of any\ncommission claimed or retained. The burden of proving that the actual\nvalue of any principal asset or asset subject to the power in trust\ndiffers from its presumptive value is upon the trustee or donee of a\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 or a charitable remainder annuity trust or a charitable\nremainder unitrust, as defined in section six hundred sixty-four of the\nInternal Revenue Code of nineteen hundred eighty-six, as amended, such\nannual commissions shall be payable from the corpus of any such trust\nafter allowance for the annuity or unitrust amounts and shall not be\npayable out of such annuity or unitrust amounts.\n 4. The commissions allowed by subdivision 2 may be retained by a\ntrustee provided he or she furnishes annually as of a date no more than\n30 days prior to the end of the trust year selected by the trustee, to\neach beneficiary currently receiving income, and to any other\nbeneficiary interested in the income and to any person interested in the\nprincipal of the trust who shall make a demand therefor and by a donee\nof a power in trust if he or she furnishes annually as of a date no more\nthan 30 days prior to the end of the calendar year to the beneficiary of\nthe power in trust, a statement showing the principal assets on hand on\nthat date, and at least annually or more frequently if the trustee or\ndonee of the power in trust so elects, a statement showing all his or\nher receipts of income and principal or property subject to the power in\ntrust during the period with respect to which the statement is rendered\nincluding the amount of any commissions retained and the basis upon\nwhich the commissions were computed. A trustee or donee of a power in\ntrust 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 in the case of a trust\ncommissions payable from income for any given trust year shall be\nallowed and retained only from income derived from the trust during that\nyear and shall not be supplied from income on hand in respect of any\nother trust year and in the case of property subject to a power in trust\ncommissions payable from income for any given calendar year shall be\nallowed and retained only from income derived from the property during\nthat year and shall not be supplied from income on hand in respect of\nany other calendar year. If a beneficiary receiving income does not\ndesire to be furnished with any such statements his or her advice to the\ntrustee or to the donee of the power in trust to that effect in writing\nshall thereafter excuse the trustee or donee of the power in trust from\nfurnishing such statement to the beneficiary unless and until the\nbeneficiary requests such annual statements from the trustee or donee of\nthe 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 the measuring life use or uses the trustee for the period of the\nmeasuring life use or uses shall be entitled to commissions from income\nand principal at the rates and according to the terms specified in\nsubdivision 2 and except in respect of principal paid out to a charity\nor for charitable uses shall be entitled to a commission for\ndistributing all sums of principal at the rate specified in subdivision\n1.\n 6. (a) Subject to section 2313 regarding multiple commissions of\nexecutors, trustees, or donees of a power in trust created under wills\nof persons dying, or lifetime trusts established, after August 31, 1993,\nif the gross value of the principal of the trust or of the property\nsubject to the power in trust accounted for amounts to $400,000 or more\nand there is more than 1 trustee or donee each trustee or donee is\nentitled to the full compensation for paying out principal allowed\nherein to a sole trustee or donee unless there are more than 3, in which\ncase the compensation to which 3 would be entitled must be apportioned\namong the trustees or donees of the power in trust according to the\nservices rendered by them respectively unless they shall have agreed in\nwriting among themselves to a different apportionment which, however,\nshall not provide for more than one full commission for any one of them.\nIf the gross value of the principal of the trust or of the property\nsubject to the power in trust accounted 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 paying out principal\nallowed herein to a sole trustee or donee of the power in trust must be\napportioned among them according to the services rendered by them\nrespectively, 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 paying out\nprincipal allowed herein 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 compensation for paying out principal\nallowed herein to 2 trustees or donees of a power of trust must be\napportioned among them according to the services rendered by them\nrespectively, unless the trustees or donees of the power in trust shall\nhave agreed in writing between or among themselves to a different\napportionment which, however, shall not provide for more than one full\ncommission for any one of them.\n (b) Subject to section 2313 regarding multiple commissions of\nexecutors, trustees, or donees of a power in trust created under wills\nof persons dying, or lifetime trusts established, after August 31, 1993,\nif the value of the principal of the trust or of the property subject to\nthe power in trust for the purpose of computing the annual commissions\nallowed by subdivision 2 amounts to $400,000 or more and there is more\nthan one trustee or donee of a power in trust each trustee or donee of a\npower in trust is entitled to the full annual commission allowed herein\nto a sole trustee or donee of a power in trust unless there are more\nthan 3, in which case the annual commissions to which 3 would be\nentitled must be apportioned among the trustees or donees of the power\nin trust according to the services rendered by them respectively unless\nthe trustees or donees of the power in trust shall have agreed in\nwriting among themselves to a different apportionment which, however,\nshall not provide for more than one full annual commission for any one\nof them. 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\ncommission 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 commission allowed herein to a sole\ntrustee or donee of a power in trust must be apportioned among the\ntrustees or donees of the power in trust according to the services\nrendered 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\nherein to a sole trustee or donee of a power in trust unless there are\nmore than 2 trustees or donees of the power in trust in which case the\nfull annual commissions allowed herein to 2 trustees or donees of a\npower in trust must be apportioned among them according to the services\nrendered by them respectively, unless the trustees or donees of the\npower in trust shall have agreed in writing between or among themselves\nto a different apportionment which, however, shall not provide for more\nthan one full annual commission for any one of them. However, if from a\ntrust or from property subject to a power in trust having a value of\n$400,000 or more, or if from a trust or from property subject to a power\nin trust having a value of $100,000, or more but less than $400,000, as\nthe case may be, at the beginning of a trust year or of the calendar\nyear any payments in partial distribution of the trust or of the\nproperty subject to the power in trust shall be made during the trust or\ncalendar year so as to reduce the trust or the property subject to the\npower in trust to a value of less than $400,000 or $100,000, as the case\nmay be, at the end of the trust or calendar year, then the annual\ncommissions allowed herein shall, on a proportionate basis, be those\nallowed to trustees of a trust or to donees of a power in trust over\nproperty having a value of $400,000 or more, or of a trust or to donees\nof a power in trust over property having a value of $100,000 or more but\nless than $400,000, as the case may be, for the period from the\nbeginning of the trust or calendar year to the date of the distribution\nand shall, on a proportionate basis, be those allowed to trustees of a\ntrust or to donees of a power in trust over property having a value of\neither $100,000 or more but less than $400,000 or less than $100,000, as\nthe case 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 or still\nsubject to the power in trust after such distribution and to the\nproperty distributed from the trust or to the beneficiary of the power\nin trust on the basis of their respective values. Further, if during a\ntrust or calendar year additional property shall be received into a\ntrust which had a value of less than $100,000 or by a donee of a power\nin trust the property subject to which had a value of less than\n$100,000, or into a trust which had a value of $100,000 or more but less\nthan $400,000 or by a donee of a power in trust the property subject to\nwhich had a value of $100,000 or more but less than $400,000, as the\ncase may be, at the beginning of the trust year or calendar year, so\nthat because of the additional property the trust or the property\nsubject to the power in trust has a value of $100,000 or more but less\nthan $400,000, or of $400,000 or more, as the case may be, at the end of\nthe trust or calendar year, then the annual commissions allowed herein\nto the trustee or to the donee of the power in trust 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 less than\n$100,000, or to trustees of a trust or to donees of a power in trust\nover property having a value of $100,000 or more but less than $400,000,\nas the case may be, for the period from the beginning of the trust or\ncalendar year to the date of the receipt of the additional property and\nshall, on a proportionate basis, be those allowed to trustees of a trust\nor to donees of a power in trust over property having a value of\n$100,000 or more but less than $400,000, or to trustees of a trust or to\ndonees of a power in trust over property having $400,000 or more, as the\ncase may be, for the remainder of the trust or calendar year.\n (c) Notwithstanding any provision of paragraphs (a) and (b) of this\nsubdivision to the contrary, if during the continuance of a trust not\nmeasured at any time directly or indirectly by a life or lives or during\nthe continuance of a trust after the termination of the measuring life\nor lives, the annual income of the trust amounts to $4,000 or more and\nthere is more than 1 trustee, each trustee is entitled to the full\ncommissions allowed under subdivision 5 to a sole trustee unless there\nare more than 2, in which case the commissions to which 2 trustees would\nbe entitled must be apportioned among the trustees according to the\nservices rendered by them respectively unless they shall have agreed in\nwriting among themselves to a different apportionment which, however,\nshall not provide for more than one full commission to any one of them.\nIf the annual income of the trust amounts to less than $4,000 and there\nis more than 1 trustee the commissions to which a sole trustee would be\nentitled under subdivision 5 must be apportioned among the trustees\naccording to the services rendered by them respectively unless they\nshall have agreed in writing among themselves to a different\napportionment.\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 and in\naddition to the commissions herein provided he or she shall be allowed\nand may retain for such services 6 percent of the gross rents collected,\nbut there shall be only one such additional commission regardless of the\nnumber of trustees or donees of the power in trust. If there are 2 or\nmore trustees or donees of the power in trust the additional commission\nherein provided for must be apportioned among them according to the\nservices rendered by them respectively unless they shall have agreed in\nwriting among themselves to a different apportionment.\n 8. If a trustee or donee of a power in trust is either authorized or\nrequired by the terms of the will to accumulate income for any purpose\npermitted by law he or she shall be entitled to commissions from the\nincome so accumulated, including income derived from the investment of\nsuch accumulated income, at the rate of 2 percent of the first $2,500 of\nsuch income distributed during the administration of the trust and 1\npercent of all such income distributed in excess of $2,500 and he or she\nmay retain such commissions at the time or times such income is\ndistributed.\n 9. 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 to a donee of a power in trust is required by\nany law of the United States or other governmental unit to be withheld\nby the person paying it for income tax purposes, the amount so withheld\nshall be deemed to have been collected.\n 10. Where the will provides a specific compensation for a trustee or\nfor a donee of a power in trust he or she is not entitled to any other\nallowances for his or her services.\n 11. 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 provided, however, that\nas used in subdivision 6 of this section, the term trustee shall include\na corporate trustee and further provided that the term "property subject\nto the power in trust" shall include property subject to a power during\nminority.\n