N.Y. Surrogate's Court Procedure Act § 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...

§ 2309. Commissions of trustees, of donees of powers during minority and

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

lifetime trusts established, after August 31, 1956

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

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

under a lifetime trust established after August 31, 1956, the court must

allow to 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 donee of a power in trust for

his or her services as trustee or donee of a power in trust a commission

from principal or from the property subject to the power in trust, for

paying out all sums of money constituting principal or property subject

to the power in trust at the rate of 1 per cent.

2. In addition to the commission allowed by subdivision 1 hereof a

trustee or 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.

(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 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 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, donee or donees. In the

case of a 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 prior election of such 12 month period shall be

binding unless, prior to January 1, 1995, the trustee 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 at the end of, or at

the option of the trustee 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 and shall be binding on

any successor or substitute trustee or trustees. The computation shall

be made on the basis of a 12-month period but the amount so computed

payable to a trustee shall be proportionately reduced or increased for

any payments made in partial distribution of the trust or the receipt of

any additional property into the trust within such period and shall be

proportionately reduced in any period for which such commissions are

payable to the trustee 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 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 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 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 or asset subject to the power in trust

differs from its presumptive value is upon the trustee or donee of a

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 or a charitable remainder annuity trust or a charitable

remainder unitrust, as defined in section six hundred sixty-four of the

Internal Revenue Code of nineteen hundred eighty-six, as amended, 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 amounts.

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

trustee provided he or she furnishes annually as of a date no more than

30 days prior to the end of the trust year selected by the trustee, 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 and by a donee

of a power in trust if he or she furnishes annually as of a date no more

than 30 days prior to the end of the calendar year to the beneficiary of

the power in trust, a statement showing the principal assets on hand on

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

donee of the 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 in the case of a trust

commissions payable from income for any given trust year shall be

allowed and retained only from income derived from the trust during that

year and shall not be supplied from income on hand in respect of any

other trust year and in the case of property subject to a power in trust

commissions payable from income for any given calendar year shall be

allowed and retained only from income derived from the property during

that year and shall not be supplied from income on hand in respect of

any other calendar year. If a beneficiary receiving income does not

desire to be furnished with any such statements 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 the measuring life use or uses the trustee for the period of the

measuring life use or uses shall be entitled to commissions from income

and principal at the rates and according to the terms specified in

subdivision 2 and except in respect of principal paid out to a charity

or for charitable uses shall be entitled to a commission for

distributing all sums of principal at the rate specified in subdivision

1.

6. (a) Subject to section 2313 regarding multiple commissions of

executors, trustees, or donees of a power in trust created under wills

of persons dying, or lifetime trusts established, after August 31, 1993,

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 each trustee or donee is

entitled to the full compensation for paying out principal allowed

herein to a sole trustee or donee 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 they 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 paying out principal

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 paying out

principal allowed herein 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

allowed herein to 2 trustees or donees of a power of 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) Subject to section 2313 regarding multiple commissions of

executors, trustees, or donees of a power in trust created under wills

of persons dying, or lifetime trusts established, after August 31, 1993,

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 a power in trust each trustee or donee of a

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

to a sole trustee or donee of a 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 of the trust 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 commission allowed herein to a sole

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

trustees or donees 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

herein to a sole trustee or donee of a 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 herein to 2 trustees or donees of a

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 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 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

commissions allowed herein 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 $400,000 or more, or 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 or still

subject to the power in trust after such distribution and to the

property distributed from the trust or to the beneficiary of the power

in trust on the basis of their respective values. Further, if during a

trust or calendar year 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 year or calendar year, so

that because of the additional property the trust or the property

subject to the power in trust has a value of $100,000 or more but less

than $400,000, or of $400,000 or more, as the case may be, at the end of

the trust or calendar year, then the annual commissions 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 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 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.

(c) Notwithstanding any provision of paragraphs (a) and (b) of this

subdivision to the contrary, if during the continuance of a trust not

measured at any time directly or indirectly by a life or lives or during

the continuance of a trust after the termination of the measuring life

or lives, the annual income of the trust amounts to $4,000 or more and

there is more than 1 trustee, each trustee is entitled to the full

commissions allowed under subdivision 5 to a sole trustee unless there

are more than 2, in which case the commissions to which 2 trustees would

be entitled must be apportioned among the trustees according to the

services rendered by them respectively unless they shall have agreed in

writing among themselves to a different apportionment which, however,

shall not provide for more than one full commission to any one of them.

If the annual income of the trust amounts to less than $4,000 and there

is more than 1 trustee the commissions to which a sole trustee would be

entitled under subdivision 5 must be apportioned among the trustees

according to the services rendered by them respectively unless they

shall have agreed in writing among themselves to a different

apportionment.

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 and in

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

and may retain for such services 6 percent of the gross rents collected,

but there shall be only one 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 for 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. If a trustee or donee of a power in trust is either authorized or

required by the terms of the will to accumulate income for any purpose

permitted by law he or she shall be entitled to commissions from the

income so accumulated, including income derived from the investment of

such accumulated income, at the rate of 2 percent of the first $2,500 of

such income distributed during the administration of the trust and 1

percent of all such income distributed in excess of $2,500 and he or she

may retain such commissions at the time or times such income is

distributed.

9. 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 to a 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.

10. Where the will provides a specific compensation for a trustee or

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

allowances for his or her services.

11. 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 provided, however, that

as used in subdivision 6 of this section, the term trustee shall include

a corporate trustee and further provided that the term "property subject

to the power in trust" shall include property subject to a power during

minority.