Trustee’s Compensation and Right of Indemnity Self-Quiz










Bennett is a trustee for property held in trust for his two nephews, Aaron and Jack. The trust agreement stipulated that the trustee is to receive a 5% commission (based on the trust value) for administering the trust. The value of the trust assets usually averaged $100,000. Bennett decided to pay himself $8,000, given the extra duties he has performed. How much commission should Bennett receive?
Choice 1 $8,000.
Choice 2 $5,000.
Choice 3 None.
Winona conveyed her small Santa Monica, CA home to Nancy (as trustee) to hold it in trust for and to pay the income to Yves. The house is right on the beach and in good repair. Several months before Winona died, she completely renovated the house. Since the home is small, it is rentable for a much smaller amount than other homes in the neighborhood. Nancy feels that if she adds another room to the home, she could rent it for a much higher rate. Yves does not feel the addition is necessary. Nancy contracts to have a new room installed for $55,000. Afterwards, the house is rented for $3,500 per month, instead of $2,500 per month. Nancy should be reimbursed from the trust for this expense.

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