## Facts

- Artist and philanthropist Robert Rauschenberg formed the Robert Rauschenberg Foundation to carry out his charitable aims after his death.
- Rauschenberg died in 2008.
- His will poured the residuary estate into his revocable trust; after specified gifts, the trust remainder was to be distributed to the Foundation.
- At death, the residuary estate was valued at more than $600 million and consisted mainly of real estate and Rauschenberg’s artwork; those assets were transferred to the trust.
- The successor trustees were Darryl Pottorf, Bennett Grutman, and Bill Goldston.
- During trust administration, the trustees undertook extensive work tied to the art-heavy portfolio, including:
  - temporarily withdrawing Rauschenberg’s art from the market to avoid depressing prices,
  - interviewing and working with appraisers,
  - arranging to secure, maintain, and preserve property, and
  - managing litigation and disputes connected to the estate/trust administration.
- The trustees later reintroduced Rauschenberg’s art to the market. Over time, the trust’s value increased substantially.
- By the time the trustees distributed the trust assets to the Foundation in 2012, the trust was valued at more than $2 billion.
- The trust terms entitled the trustees to a “reasonable” fee, and the trustees had received approximately $8 million during the administration.
- The Foundation petitioned the probate court to determine trustee compensation, contending the trustees were entitled to a total fee of $375,000.
- The trustees sought total compensation between $51 million and $55 million.
- Witnesses described the administration as unusual and testified that local institutional trustees commonly charged roughly 1–2% of trust asset value per year.
- The Foundation urged the court to apply a time-based “lodestar” approach (hours multiplied by rate), similar to attorney-fee calculations, rather than a fiduciary-compensation factor analysis.

## Issues

1. When a trust provides for “reasonable” trustee compensation, should the court calculate trustee fees using a lodestar (hours × rate) method, or apply Florida’s traditional multi-factor test for fiduciary compensation?
2. Under the governing reasonableness standard, what total trustee compensation was reasonable for administering the Rauschenberg revocable trust and distributing the remainder to the Foundation?

## Decision

- The probate court declined to use a lodestar, time-based method to set trustee compensation.
- Applying Florida’s fiduciary-compensation reasonableness factors, the court fixed total reasonable trustee compensation at $24.6 million for the three trustees.
- The court rejected the Foundation’s position that $375,000 was reasonable and also rejected the trustees’ request for $51–$55 million as too high.
- In setting the amount, the court relied on the nature and size of the trust property (high-value real estate and a large, market-sensitive body of artwork), the scope and difficulty of the services performed, the responsibility undertaken, and evidence of customary fiduciary charges.
- The fee award reflected that the trustees’ work went well beyond routine custodial services and occurred alongside a major increase in trust value before distribution.

## Legal Principles

- When a trust instrument authorizes “reasonable” trustee compensation without fixing a specific fee, the court may determine a reasonable amount based on the evidence.
- Florida courts assess trustee compensation using a multi-factor reasonableness analysis for fiduciaries (commonly associated with *West Coast Hospital Ass’n v. Fla. Nat’l Bank of Jacksonville*), considering factors such as the value and character of the trust property, the time and work required, the responsibility assumed, the skill and experience demanded by the administration, the results obtained, and customary compensation for similar services.
- A lodestar method is primarily associated with attorney-fee awards and is not required for setting trustee compensation in a trust-fee dispute.
- Determining a “reasonable” trustee fee is a fact-intensive, discretionary decision committed to the probate court, reviewed with substantial deference when supported by the record.

## Conclusion

In *In re Estate of Rauschenberg*, Case No.: 08-CP-2479 (2014), the Florida probate court resolved a fee dispute between the Robert Rauschenberg Foundation and the trust’s three successor trustees by rejecting a lodestar, time-based approach and applying Florida’s fiduciary reasonableness factors to set total trustee compensation at $24.6 million for administering and distributing a trust that grew from more than $600 million at death to more than $2 billion by distribution.


In re Estate of Rauschenberg, Case No.: 08-CP-2479 (2014)