Opinion ID: 1154523
Heading Depth: 1
Heading Rank: 3

Heading: fees charged by the cotrustees

Text: After the partial or complete funding of the Office Trust, the CRAT's, and the Charitable Trust, both defendant Holman and Seattle-First began to charge fees to these trusts for their services as trustees. Seattle-First charged its fees in accordance with its published fee schedules. In February 1980, defendant Holman began charging the trusts for his services as trustee. Initially, Holman billed the trusts on a monthly basis, based upon the hours he reportedly incurred in working as trustee. Defendant Holman's monthly billings on an hourly basis continued from February 1980 through April 1981. At this point in time, Holman devised a percentage fee whereby he would be paid a flat rate of .85 percent of the market value of each trust. Defendant Holman derived his percentage charge after considering the following factors: (a) the average charge by investment counselors in the Seattle area (0.5 percent) and nationwide (0.6 percent) (from a Wall Street Journal article); and (b) the statement in In re Powell, 68 Wn.2d 38, 43, 411 P.2d 162 (1966) that the most that the court could determine was a reasonable fee for one individual trustee was 1.5 to 1.6 times the fee that a bank trust department would charge. Holman multiplied the Seattle average of 0.5 percent times 1.5 and obtained 0.75 percent. He multiplied the nationwide average of 0.6 times 1.6 and obtained 0.96 percent. He then averaged 0.75 percent and 0.96 percent to 0.855 percent which he rounded to 0.85 percent. Defendant Holman's percentage fee took effect for the quarter beginning May 16, 1981, and has continued since that date. Holman has, however, kept additional time records since May 15, 1981. Defendant Holman's fee is taken 80 percent from principal and 20 percent from income. The cotrustees informed Beneficiaries of both Holman's fee and Seattle-First's fee in a letter to Beneficiaries dated July 23, 1981. Within approximately 4 months of receiving the cotrustees' letter regarding fees, various Beneficiaries questioned the cotrustees regarding their fees and expressed their belief that the fees were too high. From the inception of the Charitable Trust and the Office Trust through August 15, 1984, Mr. Holman has been paid fees in the amount of $537,341.65 for his services as cotrustee of the Charitable Trust and $21,402.06 for his services as cotrustee of the Office Trust. From the inception of the CRAT's through August 15, 1983, Mr. Holman has been paid $73,552.78 for his services as cotrustee of these trusts. For the period of August 16, 1983 through August 15, 1984 Mr. Holman received $19,437.86 for his services as cotrustee of the CRAT's. From the inception of the Charitable Trust and the Office Trust through August 15, 1984, Seattle-First has been paid $413,604.28 for its services as cotrustee of the Charitable Trust and $13,943.36 for its services as cotrustee of the Office Trust. For the period from the inception of the CRAT's through August 15, 1983, Seattle-First was paid $101,937.63 for its services as cotrustee of the CRAT's and for the period August 16, 1983 through August 15, 1984 Seattle-First was paid $25,998.08 for its services of cotrustee of the CRAT's. While Seattle-First did allow defendant Holman to be paid his fee of 0.85 percent of asset value, it never approved of this fee.