Posted by Bill Gatten on February 06, 2001 at 02:25:14:
In various articles written on the subject, fees are not discussed, other than to say that a bona fide land trust trustee (if it is to stand up in court, and is a corporation) should be charging a fee “…commensurate with industry standards.”
Our Trustee (PAC Holdings) charges $12.00 per month per property. Chicago title charges 1/20th per year of the property’s value at inception, plus an acceptance fee… etc.
Posted by John Ohio on February 05, 2001 at 20:45:10:
With so land trusts and so many trustees, what is a reasonable compenstaion for each of them? Does this increase a liability to them? How do they report this income to IRS? PLease help!
Thanks
John
Posted by Randy M on February 06, 2001 at 14:41:36:
John,
In most states there is a regulated maximum amount that an institutional trustee can charge. For instance in my state, SD, the trustee is allowed up to 1.5% of the trust corpus annually, plus reasonable expenses.
Of course any trustee compensation should be looked at as taxable income to that trustee.
There is at least some liability to a trustee, but it is normally (not always, but normally) limited to competent management of the trust assets. Trustees do have an absolute responsibility to manage the trust assets in the most competent manner.
I recommend you take a look at Gatten’s deal. It will solve a lot of problems for you for just a few bucks a month.
This should answer your questions - in a general way - but let me know if you need more specific information.