California attorney convinces her clients she can act as trustee in their living trusts She continues to bill her attorney hourly rate for trustee functions Is this OK?

Answer 1

This is not OK unless the client is fully aware of what he/she is doing and does so as his/her own knowing and voluntary act. In a living trust, the person making the trust (the settlor) has the power to fix the trustee's rate of compensation. In absence of specific directions in the trust, there should be state statutes governing the rate of compensation. If the statutory rate applies, then the attorney may not charge her hourly attorney's rate for what she does in the ordinary exercise of the functions of a trustee. This is generally part of the compensation rate statutes. Another reason why it is not OK is that attorneys are supposed to charge only for legal services rendered unless the client agrees otherwise. The ordinary functions of a trustee, such as investing assets, keeping the books and making payment out of the trust can be performed by a non-attorney and are not considered "legal services". Thus the attorney should not be charging her legal services rate for what are non-legal services. Further, it might even be unethical and even constitute undue influence. If the attorney does not clearly explain that she will be charging her hourly rate and that that will cost much more than the statutory commission statutes provide, then she is not properly representing her client. In fact she is doing her clients a disservice because the attorney must look out for the client's best interest over her own and she is not doing that if she misleads her client into paying more for a trustee's services than the client should be paying. This is especially wrong when the attorney herself is the recipient of the excess amount being paid.