Q&A: Management Fee Concerning Irrevocable Trust

Q. My question is about an irrevocable trust I have set up. I would like to put my co-op into the trust. I have paid the co-op’s attorney $700 and submitted appropriate papers. Now the management says first I need to pay them $625 to complete the paperwork. After speaking to the board president, the management called me and said the fee is now $300. I’m not clear why I’m being charged by the management since the attorney has completed all the paperwork. Does the board make this decision or is the management fee justified? And who gets the $300, the co-op or the manager?

                                    —What’s the Deal?

A. “The fees that the managing agent charges should be set forth in the management agreement,” says attorney Martin Kera of the Manhattan-based firm Kera & Graubard. “Many management companies circulate a list of fees that they charge for various transactions.  The fee of $700 for the attorney to review the agreement appears reasonable. The managing agent fee appears to be the typical fee that a managing agent charges the transferor on a closing.  I would guess that the board president asked the management company to reduce their fee because they weren’t actually having a sit-down closing.  The $300 will go to the managing agent.  The fees are what are customarily charged for these transactions.”

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