N.Y. Surrogate's Court Procedure Act § 2308: Commissions of trustees, donees of power during minority and donees of powers in trust under wills of persons dying, or under lifetime tr...

§ 2308. Commissions of trustees, donees of power during minority and

donees of powers in trust under wills of persons dying, or

under lifetime trusts created, on or before August 31, 1956

1. On the settlement of the account of any trustee or donee of power

in trust under the will of a person dying on or before August 31, 1956,

or under a lifetime trust established on or before August 31, 1956, the

court must allow him or her his or her reasonable and necessary expenses

actually paid by him or her and if he or she be an attorney of this

state and shall have rendered legal services in connection with his or

her official duties, such compensation for his or her legal services as

shall appear to the court to be just and reasonable and in addition

thereto it must allow to the trustee or to the donee of the power in

trust for his or her services as trustee or donee of the power in trust

the following commissions from trust principal or property subject to

the power in trust:

(a) For receiving principal or property subject to the power in trust

(1) all sums of money constituting principal or property subject to

the power in trust not exceeding $2,000 at the rate of 3 per cent;

(2) all additional sums of principal or property subject to the power

in trust not exceeding $10,000 at the rate of 1 1/2 per cent;

(3) all sums of principal or property subject to the power in trust

above $12,000 at the rate of 1 1/4 per cent; and

(b) For paying out principal or property subject to the power in trust

at the rate of 1 per cent.

(c) Notwithstanding the provisions of section 8 of chapter 237 of the

laws of 1978, commissions provided by paragraph (a) of this subdivision

for receiving principal or property subject to the power in trust shall

not be allowed to a trustee or donee of a power in trust who qualifies

to act as such on or after June 5, 1978, and shall not be allowed on

additions of property received on or after June 5, 1978; such

commissions on any increments in property that are payable by reason of

any sale, exchange or liquidation of such property shall be allowed on

the lesser of (1) the amount of such increments on the date of sale,

exchange or liquidation of such property and (2) the amount of such

increments on June 5, 1978; and such commissions on any increments in

property that are payable by reason of any distribution of such property

shall be allowed on the lesser of (1) the amount of such increments on

the date of distribution of such property and (2) the amount of such

increments on the effective date of this paragraph.

2. In addition to the commission allowed by subdivision one a trustee

or a donee of a power in trust shall be entitled to annual commissions

at the following rates:

(a) $10.50 per $1,000 or major fraction thereof on the first $400,000

of principal or property subject to the power in trust;

(b) $4.50 per $1,000 or major fraction thereof on the next $600,000 of

principal or property subject to the power in trust; and

(c) $3.00 per $1,000 or major fraction thereof on all additional

principal or property subject to the power in trust.

Such annual commissions shall be computed either on the value of the

principal of the trust or of the property subject to the power in trust

at the end of the period for which the commissions are payable or, at

the option of the trustee or of the donee of the power in trust, on the

value of the principal of the trust or of the property subject to the

power in trust at the beginning of such period, provided that the option

elected by the trustee or of the donee of the power in trust for the

first period for which such commissions are payable shall be used during

the continuance of the trust or of the power in trust and shall be

binding on any successor or substitute trustee or trustees or successor

or substitute donees of the power in trust. In the case of a trust or

power in trust which prior to January 1, 1994 computed annual

commissions on the basis of a 12 month period (other than a calendar

year), the trustee's or donee's prior election of such 12 month period

shall be binding unless, prior to January 1, 1995, the trustee or donee

makes a new election to compute annual commissions on the basis of a

calendar year either on the value of the principal of the trust or of

the property subject to the power in trust at the end of, or at the

option of the trustee or donee of the power in trust at the beginning

of, the calendar year for which the commissions were payable, which new

election shall be used during the remaining continuance of the trust or

of the power in trust and shall be binding on any successor or

substitute trustee or trustees or donee or donees of the power in trust.

The computation shall be made on the basis of a 12 month period but the

amount so computed payable to a trustee or donee of a power in trust

shall be proportionately reduced or increased for any payments made in

partial distribution of the trust or of the property subject to the

power in trust or receipt of any additional property into the trust or

by the donee of a power in trust within such period and shall be

proportionately reduced in any period for which such commissions are

payable to the trustee or donee of the power in trust if the period is

less than 12 months. For the purpose of computing the annual commissions

the value of any principal asset when received by the trust or by the

donee of a power in trust shall be the presumptive value of the asset at

the beginning and end of the period for which such commissions are

payable. In computing the value of the principal of the trust or of the

property subject to the power in trust the trustee or the donee of the

power in trust may use the presumptive value in respect of any principal

asset or may use the actual value of the asset. On the settlement of the

account of the trustee or of the donee of a power in trust any person

interested may dispute the amount of any commission claimed or retained.

The burden of proving that the actual value of any principal asset

differs from its presumptive value is upon the trustee, the donee of the

power in trust or other person claiming the difference.

3. Unless the will or lifetime trust instrument otherwise explicitly

provides, the annual commissions allowed by this section shall be

payable one-third from the income of the trust and two-thirds from the

principal of the trust. However, in the case of a trust whose definition

of income is governed by section 11-2.4 of the estates, powers and

trusts law, such annual commissions shall be payable from the corpus of

any such trust after allowance for the annuity or unitrust amounts and

shall not be payable out of such annuity or unitrust amount and shall

not be payable out of such unitrust amount.

4. The commissions allowed by subdivision 2 may be retained by a

trustee or donee of a power in trust provided he or she furnishes

annually as of a date not more than 30 days prior to the end of the

trust year selected by the trustee or the calendar year, to each

beneficiary currently receiving income, and to any other beneficiary

interested in the income and to any person interested in the principal

of the trust who shall make a demand therefor or to the beneficiary of

the power in trust who shall make a demand therefor, a statement showing

the principal assets or the property subject to the power in trust on

hand on that date, and at least annually or more frequently if the

trustee or donee of a power in trust so elects, a statement showing all

his or her receipts of income and principal or property subject to the

power in trust during the period with respect to which the statement is

rendered including the amount of any commissions retained and the basis

upon which the commissions were computed. A trustee or donee of a power

in trust shall not be deemed to have waived any commissions by reason of

his or her failure to retain them at the time when he or she becomes

entitled thereto; provided however that commissions from income for any

given trust or calendar year shall be allowed and retained only from

income derived from the trust or from the property subject to the power

in trust during that year and shall not be supplied from income on hand

in respect of any other trust or calendar year. If a beneficiary

receiving income does not desire to be furnished with any such statement

his or her advice to the trustee or to the donee of the power in trust

to that effect in writing shall thereafter excuse the trustee or donee

of the power in trust from furnishing such statement to the beneficiary

unless and until the beneficiary requests such annual statements from

the trustee or donee of the power in trust.

5. (a) During the continuance of a trust created solely for public,

religious, charitable, scientific, literary, educational or fraternal

uses and during the period of continuance of such a trust established

after the termination of a life use or uses the trustee shall be

entitled to and may retain annual commissions according to the terms

specified in subdivision 2 of this section, but only to the extent of 80

percent of the rates stated therein. Notwithstanding any other provision

of law, with respect to any portion of such trust which exceeds a

principal value of twenty million dollars, the trustee may only take

annual commissions to the extent of 50 percent of the rate specified in

paragraph (c) of subdivision 2 of this section.

(b) In the case of a trust described in paragraph (a) of this

subdivision, a trustee shall not be entitled to any commission from

principal as specified in subdivision 1 of this section for paying out

principal.

(c) In the case of such a trust which continues after the termination

of a life use or uses the trustee for the period of the measuring life

or lives shall be entitled to commissions from income and principal at

the rates and according to the terms otherwise provided in this section,

except that he or she shall not be entitled to any commissions for

paying out any amount of principal.

6. (a) If the gross value of the principal of the trust or of the

property subject to the power in trust accounted for amounts to $400,000

or more and there is more than 1 trustee or donee of the power in trust,

each trustee or donee of the power in trust is entitled to the full

compensation for receiving and paying out principal or property subject

to the power in trust allowed herein to a sole trustee or donee of the

power in trust unless there are more than 3, in which case the

compensation to which 3 would be entitled must be apportioned among the

trustees or donees of the power in trust according to the services

rendered by them respectively, unless the trustees or donees of the

power in trust shall have agreed in writing among themselves to a

different apportionment which, however, shall not provide for more than

one full commission for any one of them. If the gross value of the

principal of the trust or of the property subject to the power in trust

accounted for is:

(i) less than $100,000 and there is more than 1 trustee or donee of

the power in trust the full compensation for receiving and paying out

principal or property subject to the power in trust allowed herein to a

sole trustee or donee of the power in trust must be apportioned among

them according to the services rendered by them respectively, or

(ii) $100,000 or more but less than $400,000, each trustee or donee of

the power in trust is entitled to the full compensation for receiving

and paying out principal or property subject to the power in trust

allowed pursuant to this subdivision to a sole trustee or donee of the

power in trust unless there are more than 2 trustees or donees of the

power in trust in which case the full compensation for paying out

principal or property subject to the power in trust allowed pursuant to

this subdivision to 2 trustees or donees of the power in trust must be

apportioned among them according to the services rendered by them

respectively,

unless the trustees or donees of the power in trust shall have agreed in

writing between or among themselves to a different apportionment which,

however, shall not provide for more than one full commission for any one

of them.

(b) If the value of the principal of the trust or of the property

subject to the power in trust for the purpose of computing the annual

commissions allowed by subdivision 2 amounts to $400,000 or more and

there is more than one trustee or donee of the power in trust, each

trustee or donee of the power in trust is entitled to the full annual

commission allowed herein to a sole trustee or donee of the power in

trust unless there are more than 3, in which case the annual commissions

to which 3 would be entitled must be apportioned among the trustees or

donees of the power in trust according to the services rendered by them

respectively, unless the trustees or donees of the power in trust shall

have agreed in writing among themselves to a different apportionment

which, however, shall not provide for more than one full annual

commission for any one of them. If the value of the principal or of the

property subject to the power in trust for the purpose of computing the

annual commission allowed by subdivision 2 amounts to:

(i) less than $100,000 and there is more than 1 trustee or donee of

the power in trust, the annual commissions from income and the annual

commission allowed herein to a sole trustee or donee of the power in

trust must be apportioned among the trustees or donee of the power in

trust according to the services rendered by them respectively, or

(ii) $100,000 or more but less than $400,000, each trustee or donee of

the power in trust is entitled to the full annual commission allowed

pursuant to this subdivision to a sole trustee or donee of the power in

trust unless there are more than 2 trustees or donees of the power in

trust in which case the full annual commissions allowed pursuant to this

subdivision to 2 trustees or donees of the power in trust must be

apportioned among them according to the services rendered by them

respectively,

unless the trustees or donees of the power in trust shall have agreed in

writing between or among themselves to a different apportionment which,

however, shall not provide for more than one full annual commission for

any one of them. However, if from a trust or from property subject to a

power in trust having a value of $400,000 or more, or if from a trust or

from property subject to a power in trust having a value of $100,000 or

more but less than $400,000, as the case may be, at the beginning of a

trust year or of the calendar year in the case of a power in trust, any

payments in partial distribution of the trust or of the property subject

to the power in trust shall be made during the trust or calendar year so

as to reduce the trust or of the property subject to the power in trust

to a value of less than $400,000 or $100,000, as the case may be, at the

end of the trust or calendar year, then the annual commission allowed

herein shall, on a proportionate basis, be those allowed to a trustee of

a trust or to donees of a power in trust over property having a value of

$400,000 or more, of a trust or to donees of a power in trust over

property having a value of $100,000 or more but less than $400,000, as

the case may be, for the period from the beginning of the trust or

calendar year to the date of the distribution and shall, on a

proportionate basis, be those allowed to trustees of a trust or to

donees of a power in trust over property having a value of either

$100,000 or more but less than $400,000 or less than $100,000, as the

case may be, for the remainder of the trust or calendar year and the

part of such commissions payable from principal and computed from the

beginning of the trust or calendar year to the date of distribution

shall be charged ratably to the property remaining in the trust and to

the property distributed from the trust on the basis of their respective

values. Further, if during a trust year or a calendar year in the case

of power in trust additional property shall be received into a trust

which had a value of less than $100,000 or by a donee of a power in

trust the property subject to which had a value of less than $100,000,

or into a trust which had a value of $100,000 or more but less than

$400,000 or by a donee of a power in trust the property subject to which

had a value of $100,000 or more but less than $400,000, as the case may

be, at the beginning of the trust or calendar year so that because of

the additional property the trust or the property subject to the power

in trust shall have a value of $100,000 or more or of $400,000 or more,

as the case may be, at the end of the trust or calendar year, then the

annual commission allowed herein to the trustee or to the donee of the

power in trust shall, on a proportionate basis, be those allowed to

trustees of a trust or to donees of a power in trust over property

having a value of less than $100,000, or to trustees of a trust or to

donees of the power in trust having a value of $100,000 or more but less

than $400,000, as the case may be, for the period from the beginning of

the trust or calendar year to the date of the receipt of the additional

property and shall, on a proportionate basis, be those allowed to

trustees of a trust or to donees of a power in trust over property

having a value of $100,000 or more but less than $400,000, or to

trustees of a trust or to donees of a power in trust over property

having $400,000 or more, as the case may be, for the remainder of the

trust or calendar year.

7. Where a trustee or donee of a power in trust is for any reason

entitled or required to collect the rents of and manage real property

the net amount of rents collected and not the gross amount shall be used

in making computation of commissions allowed by subdivision 5 hereof and

in addition to the commissions herein provided he or she shall be

allowed and may retain for such services 6 per cent of the gross rents

collected, but there shall be only 1 such additional commission

regardless of the number of trustees or donees of the power in trust. If

there are 2 or more trustees or donees of the power in trust the

additional commission herein provided must be apportioned among them

according to the services rendered by them respectively unless they

shall have agreed in writing among themselves to a different

apportionment.

8. A trustee who prior to September 1, 1966 shall have received the

maximum amount of commissions on principal permitted by subdivision 8 of

section 285-a of the surrogate's court act as that subdivision existed

prior to that date, shall not be entitled to annual principal

commissions for the period from the date when he or she shall receive

such maximum and September 1, 1966, but shall be entitled to receive

commissions from and after September 1, 1966 at the rates and in the

manner provided in this section. A trustee who has become entitled to

annual principal commissions pursuant to section 285-a of the

surrogate's court act as it existed prior to September 1, 1966, but has

not received them, may receive an amount of commissions not in excess of

the amount he or she would have been entitled to if he or she had taken

such commissions, and be entitled to receive in addition commissions

from and after September 1, 1966 at the rates and in the manner provided

in that section.

9. A trustee who has been acting prior to July 1, 1956 shall be

entitled to have commissions on principal and income theretofore

received by him or her computed, allowed and paid under the methods and

at the rates set forth herein, except as follows:

(a) If prior to July 1, 1956 a trustee has been allowed or has

retained commissions for receiving and paying out or for distributing

any item of principal he or she shall be entitled to no further

commissions on the item.

(b) If prior to July 1, 1956 a trustee has been allowed or retained

commissions on any item of principal received but not paid out or

distributed by him or her he or she shall be entitled to no further

commissions for receiving the item.

(c) Any trustee who became entitled to an annual principal commission

under subdivision 1 (b) of section 285-a of the surrogate's court act as

it existed prior to April 1, 1948 and who has not retained such

commission may retain an amount equal to one-half of such annual

principal commission. A trustee who because of the provisions of

subdivision 2 of section 285-a of the surrogate's court act as it

existed prior to April 1, 1948 either was not entitled to retain an

annual principal commission under subdivision 1 (b) thereof or was

required to credit such annual principal commission against his or her

commission for receiving principal, may retain an amount equal to 1/2 of

such annual principal commission. If a trustee has been allowed by

decree or has retained any such annual principal commission one-half the

amount thereof shall be deducted from the amount of commissions to which

the trustee would otherwise be entitled under the provisions of

subdivision 1.

(d) The annual principal commissions allowed by subdivision 3 of this

section as it existed on September 1, 1967 shall not be allowed or

retained in respect of any trust year ending prior to April 1, 1948, but

for any trust year ending on or after April 1, 1948 and prior to July 1,

1956, the annual principal commission which may be allowed or retained

shall be computed at the rates in effect on the date such trust year

ended.

(e) If prior to July 1, 1956 a trustee has been allowed or has

retained commissions on any item of income received and paid out by him

or her prior to September 1, 1943 or on any item of income collected by

him or her subsequent to September 1, 1943 he or she shall be entitled

to no further commission on the item.

10. The value of any property to be determined in such manner as

directed by the court and the increment thereof received, distributed or

delivered shall be considered as money in making computation of

commissions. Whenever any portion of the dividends, interests or rents

payable to a trustee or donee of a power in trust is required by any law

of the United States or other governmental unit to be withheld by the

person paying it for income tax purposes, the amount so withheld shall

be deemed to have been collected.

11. Where the will provides a specific compensation to a trustee or

donee of a power in trust he or she is not entitled to any other

allowances for his or her services.

12. If a trustee of a trust is authorized or required by the terms of

the will to accumulate income for any purpose permitted by law, any

income so accumulated which is not added to principal of the trust shall

be deemed a separate trust for purposes of this subdivision and the

trustee shall be entitled to commissions in respect thereof at the rates

and according to the terms and provisions of subdivisions 1, 2 and 5 of

this section as though, for purposes of computing commissions of the

trustee, income so accumulated was principal.

13. For the purposes of this section, the term "trustee" shall mean

any trustee who is not a corporate trustee and the term "donee of a

power in trust" shall mean any such donee including a donee of a power

during minority who is not a corporate fiduciary of a donee of a power

during minority with the rights and duties of a guardian under section

1714 of this chapter provided, however, that as used in subdivision 6 of

this section, the term trustee shall include a corporate trustee.