We don’t have a trust.
Yes, but there needs to be agreement on who/how it’s all paid…
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It’s all outlined very clearly.
I have a question about the fees that the executor can collect. When my DMIL died my DH and his brother were the executors they did not collect the fee. It was a lot of work and because we are out of state, there were lots of express mailings back and forth. (Also, her bank was a PITA to work with. They wanted the same form signed and notarized 3 different times.)
My DH is now listed as the sole executor of his aunt’s estate. She is still alive, and in good health, but she is in her 80’s so who knows. She will not divulge the contents of her will, so he doesn’t know as much as he would like. She never had children. There are 15 nieces and nephews (with 2 of them deceased and those 2 have a total of 10 children.) She is also out of state. I told DH that he will take the fees that he will be entitled to. I think that he feels uncomfortable about it, but since she is out of state, it will be a hassle to administer it.
So, have you taken the fees, or not?
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We didn’t take fees. It was a ton of work but the inheritance was split just between two of us.
My friends who had to administer a more complicate estate did take a fee. I think it varies state by state.
I don’t think I would take a fee, but I would charge the estate for any expenses like paying to have things overnight mail or other postage. Or if I had to pay to have a lot of copies made…or whatever.
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Might depend on the size of the estate. Executor fees are deductible expenses on the federal estate tax return. Otherwise if the executor(s) are the only beneficiaries under the will it might be better not to because fees are considered income and taxed at that rate whereas distributions under the will are not.
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My mother’s will stated that fees will not be paid to the executor (me) and I was the one who sat with her when she had the her new will drawn up. I did charge through any expenses relating to selling the house, and all legal and accounting fees. The executor fees allowed would have been a surprisingly significant sum.
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My brother did on my uncle’s estate. I did not on my mother’s.
I have not taken fees, even when there were quite a few beneficiaries and things were complicated houses to sell, etc.). I don’t think any of them would have minded if I had, but I felt that the deceased would would have approved of my doing this competently for family. Sounds nuts, I know, but…
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depends on the assets to be divided. Does she have a house to sell? Some states have specific fee schedules.
That said, a fee of 1% is not uncommon. 2% if real estate is involved. Note, this fee is taxable income to the Trustee, which is why it’s not worth taking it if the Trustee is also a significant heir.
All necessary expenses are different from that of a Trustee fee.
A friend who was executor (in another state) thought the law would allow him to charge expenses and $40/hour for his time to the state. I think he charged most expenses but not the time.
My SisIL’s estate was pretty complicated with significant assets in several financial institutions, real estate and an estate attorney who was borderline helpful/nonhelpful. The executor charged us what he considered reasonable fees (he’s the husband of my cousin and a law school graduate). He had experience as executor of other estates and communicated well with everyone and got all the assets promptly divided and distributed.
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My brother didn’t take any fees when he settled our youngest brother’s estate, nor did he take any when he settled our parents’ estate. However, we made him take fees when he settled our oldest brother’s estate. Our brother died intestate, and it was a LOT of work (including filing back taxes). He earned every penny.
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I would definitely get reimbursed for any expenses incurred (by banks, or shipping, etc.)
This reminds me of a situation from many years ago. A relative of my sister’s husband died. She had no children and split her estate in her will between a dozen nieces and nephews. I think my brother in law was the executor (one of the nephews). It was a big problem arranging the funeral - she had not left any instructions or prepaid, and the heirs could not agree and the funeral parlor was not happy dealing with all these people. So I suggest your DH ask his aunt to at least prepay or arrange for her funeral in advance.
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All expenses incurred related to settling the affairs of the deceased can be charged against the estate. When my youngest brother died, his college aged D was angry that my executor brother repaid expenses related to travel to the location, hotel and food, and moving expenses to bring his belongings back. She felt that it cut into her inheritance, and apparently she needed it more than those who took care of everything. It led to tension between my niece and the rest of the family, but nothing that was done was shady. People can get weird when money is involved.
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People DO get weird, and often in some unexpected ways.
Takes a thick skin to be an executor for a family member… even when the sums in question are quite trivial (i.e. a night in a hotel for an early morning meeting with a lawyer or real estate broker the next morning).
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Unfortunately some of the trickiest work will be for executors of low income relatives…. possibly with expenses but zero payout. If there is extended time in nursing home at end, Medicaid could have lien on all the assets.
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I noticed Totten Trust (POD account, payable on death) described at one of my banks. I see no advantage of this over designating account beneficiaries, a form also available at same bank. In fact, beneficiary form is more flexible since it allows specification of percentages, rather than even split. (Both methods would avoid probate for that asset, without the need to set up a formal trust.) What am I missing?
looks the same as PoD/ToD to me. The only question might be does a Totten have any special significance in your state such that funds in a Totten account avoid probate but PoD/ToD in your state does not. (In my state of CA, PoD/ToD definitely avoids probate.)
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