Sixteen years after the legendary singer James Brown’s passing, we have yet another dispute involving his estate. In May of 2022, the South Carolina Supreme Court has upheld a circuit court decision ruling that a Adele Pope, a court-appointed former trustee, will NOT receive additional payment for her time as the trustee.
It turns out that Pope (along with another attorney) was appointed by the Court as a special administrator to oversee the three named trustees. After uncovering “serious financial misconduct” the court appointed Pope (along with the other guy) replacement-trustee and granted a payment of $320,000 for their work.
Once the estate reached a settlement, Pope (and the other dude) was removed as trustee and Pope (and what’s his face) submitted a claim for $5M, outstanding payments for her work as trustee. The other attorney settled for an undisclosed amount, but Pope took it the supreme court (of South Carolina, that is). The estate would have none of it and sued Pope, claiming that she caused “undue delay” and her decisions “breached her duty of prudence.” Yikes! The Supreme Court held that “the benefits from her administration did not outweigh the harm caused…” and no additional payment was granted to Pope.
So, what can we learn from the Godfather of Soul’s latest dispute? What can be said about trustee compensation?
Most well drafted trusts refer to the Florida statute (Fla. Stat. 736.0708) regarding trustee compensation. The statute is a good start, stating that a trustee may receive “reasonable compensation under the circumstances” for their work. Should it make it in front of the Judge, the Court does have flexibility in increasing or decreasing the trustee compensation depending on the facts. In general, family members (that get along) do not typically charge the trust for their work as the trustee, and if they do, it’s a nominal amount. However, we do sometimes find ourselves with a gap in trustee and fill it with a fiduciary (like an accountant or a financial planner) acting as a trustee and those guys do want to get paid. A good practice is ensuring that we have ample backups listed and we contemplate the trustee compensation at the drafting stage.
As to Pope’s $5M claim, it’s hard to know if the complex matters associated with Brown’s celebrity and the various contests to his estate plan warrant such a high payment, but that’s why we have the Supreme Court (of South Carolina that is) to assist.
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