<p>Attorney fees tend to be related to complexity. The one bill we recently authorized payment was one involving writing estate documents literally the weekend the testator was dying and advising the family for 9 months following the death, with multiple IRS and other accounts as well as several pieces of real estate in two states. Her bill to date has been $20K, which everyone feels is quite reasonable and saved many times that amount in probate fees, in addition to allowing much quicker access to assets. The executor also billed $20K, which was also cheerfully paid from estate assets. </p>
<p>There will likely be another bill for the real estate and winding things up, but its well worth it, according to the beneficiaries.</p>
<p>I thought I had survivorship and that the account was legally mine. I have chosen to use it as the estate account because it is the right thing to do and it is what my mother wanted. Inparent: you mentioned that I was “gifting” my brother with any funds I give him. Is there any legal implication that would make this a problem? I have to tell you that with reservations about disbursing funds and knowing that this is in the eyes of the law my account it really came as a kick in the butt when conditions were listed regarding the terms with which I would be paid back if I needed the money to pay off mom’s bills. (BTW that is where this whole thread started.) Regardless of who this account belongs to it does seem that legitimate bills should be paid off if the medical provider doesn’t decide to write them off. Isn’t it my responsibility to see that this happens. Also would this nullify a need to print a newspaper add. Truly I think that anyone who did come forward would be a crook.</p>
<p>Again, if this money is not part of the estate then who is responsible for paying her bills if there are any and with what funds? I kept asking the bankers about that when I learned about dividing the account and all they told me was that the POD funds could not go to that purpose. That isn’t too much of a concern because thanks to my cash shuffling those last couple of months (for a totally different reason) the funds in “my” account should be sufficient to cover any bills. I am just wondering what the legal answer to this question would be.</p>
<p>HImom,
Talk to your legal advisor who is drafting the trust. Usually, one also executes a will contemporaneously, that automatically leaves all assets to the trust (if the spouse predeceases). It is one-stop shopping, so to speak.</p>
<p>There is no harm in contacting an attorney, other than the expense. Using the same attorney who drafted your trust/will will save on costs as s/he is intimately familiar with the estate already.</p>
<p>Printing an ad is the requirement of many states in order to give all creditors whom you may be unaware of to submit their claims and allowing a FINAL discharge. You don’t have to agree that bills submitted are legit, but it provides a formal cutoff and a neater way to provide official, legally recognized notice to potential creditors. </p>
<p>Since this estate is $100,000s, I’d say that refusing to pay for an attorney and post the notice would be penny wise and pound foolish.</p>
<p>Futurelaw, you are really short changing yourself by not consulting a knowledgeable attorney in the state where you and deceased mom lives in to guide you and help answer some of your basic questions. They can give you a cost estimate of their services, but stumbling around on your own can cost you a lot of $$$$$.</p>
<p>Printing the ad also starts the clock on the minimum period required by your state. I know you said you researched, OP, but you can see how many loose ends are left.</p>
<p>Yes, you can and really should discharge her debts.<br>
Gifting: aiui, after what the bar is (now 12 or 13k?) the gifter pay taxes on the amount. In your situation, you really need advice because, if you choose to share, it may need to be done other than in one lump sum.</p>
<p>Bay, I assume this is a reference to the estate I been involved with. The deceased owned 14 rental properties, a house in another state, and a house in a foreign country. He also had mental health issues before his death that complicated finding some assets, and one unwieldly heir who hauled us into court a few times regarding handling of various components of the estate. Compound that by the bottom dropping out of the real estate market about 18 months after the death, and that is how you can run up $75K in attorney bills. Obviously that is not a typical situation! I will say that my dad has taken some steps to simplify some of his holdings and asset situations as he has watched our struggle with this (and written the unwieldy heir right out of his will in hopes we will not have to deal with that again as executors of his estate, but that is another story!).</p>
<p>OP, I can’t advise you further on how to handle that account and the estate expenses. You need an attorney in your state to do that. Even if I were certain of the answer for the states I have been dealing with, it might be different in your state. Also, obviously bankers are not lawyers – they just hand out the POD funds, but are never in the mix if some of those funds need to be collected back later to cover estate expenses. As I said above, don’t pay any more bills until you see an attorney and explain all the assets and what has happened to them so far, the liabilities you know about, and any other liabilities you believe might exist. If you want to be prepared for that meeting, make a list of all assets with the value as of the person’s date of death (look for statements, etc. to get as close as you can). Include any POD/beneficiary info and what has happened since then to the asset. Also make a list of all liabilities (bills or any outstanding debt) paid or received since the death, and what resource was used to pay them if you have done so. Take the will if you have one as well. The more organized your materials and your summary is, the less you will spend on his time getting advice. But that really is your next step. Let us know how it goes.</p>
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<p>Ask your attorney about the specific debts. There are some conditions in which you would NOT need to/want to. I won’t go into detail here, but we had some that we did not have to cover (but our situation was different than the OP, partly due to the type of debt and also the specific state laws). Suffice to say that you should discuss with your attorney.</p>
<p>"Giftting: aiui, after what the bar is (now 12 or 13k?) the gifter pay taxes on the amount. In your situation, you really need advice because, if you choose to share, it may need to be done other than in one lump sum. "</p>
<p>lookingforward THANK YOU for that one!!! This is definitely another reason to speak with an attorney. I didn’t see that coming at all!!! BTW the attorney I spoke with on the phone this week said he was going to email me information like you described above. Thank you so much for your guidance. As many have said I really don’t know what I don’t know.</p>
<p>The current tax-free giftable amount is $14,000 per year from one person to another. A married couple could gift $28,000/year to each child and grandchild, for example.</p>
<p>I agree your experience was a complicated one, whereas OP’s appears to be fairly straightforward, (but not without issues). My concern is that some of the comments on this thread are scaring OP more than he needs to be scared, because they involve estate situations that are not really comparable to the one he is dealing with.</p>
<p>This is true, but there’s also a lifetime exclusion of $5.25 million. It doesn’t sound like the OP will owe federal gift taxes, but he/she would still have to report the taxable gift on a Gift Tax Return (IRS Form 709).</p>
<p>Whether state death taxes are owed on the gift depends on the state. As I mentioned upthread, MIL’s state looks back one year from death and assesses estate tax on the amount.</p>
<p>" It doesn’t sound like the OP will owe federal gift taxes, "</p>
<p>What clues you in to that? There is no danger of hitting the 5.25 mil mark but if I do not figure things out strategically I will be gifting well over 14K to one person. Yikes it never occurred to me that sharing the wealth would be a liability!</p>
<p>Each person has the ability to give away (or will) a total of $5M before you pay any estate taxes. The gift tax and estate tax are integrated to keep people from giving away their estate before they die.</p>
<p>If you give more than 14K to one person, the excess simply gets “charged” or accounted for against your total $5M exemption, reducing it by the excess over 14k. No one will have to pay federal estate taxes. The 14K is an annual “leakage” or “allowance” that doesn’t reduce your lifetime $5M exemption. That’s all.</p>
<p>You opened the trust for a reason, so don’t let it go unfunded and lose the benefit you were seeking to gain.</p>
<p>I’m going through this with my mom right now. She’s in the process of re-titling her assets to her living trust. It’s a big pain in the butt for her. Most entities have been pretty helpful - they send her forms and she has to get Medallion Signature Guarantees and send them back with copies of the Trust Abstract. Just getting the Medallion Signature Guarantees took almost 2 hours with the person who did it - a bank manager, in our case. (For those who don’t know, Medallion Signature Guarantee is sort of like a notarized signature but there’s a lot more paperwork behind it.)</p>
<p>The entities that have been the biggest problems are the banks themselves. Mom’s attorney warned us and was right, that every bank wants a copy of the <em>entire</em> trust document (in her case about 50 pages) and not the abstract. They send it to their legal department who decides if they will accept the documents. So far so good for mom, but it’s still a pain in the neck, and takes time to get their answers back.</p>
<p>I don’t know the process to re-title her house, since she’s selling it soon and will just title the new one to the trust at that time.</p>
<p>I’m very glad my mom’s willing to do all of this now so things will be easier for me when the time comes.</p>
<p>Whew, so what you are saying is that all money going to one person that is more than 14K in one year gets recorded on my taxes but isn’t charged any tax until I got lucky enough to give away a total of 5 million in my lifetime. If I gave 14K to 6 people in one year none of it would need to be accounted for but 1000 of a single 15K gift to one person would need to be accounted for on my taxes. Is this the way it works?</p>
<p>Just sayin’, there’s a difference between “estate tax”, “inheritance tax” and “gift tax”. There are Federal taxes, and some states also impose taxes. THIS is why it’s important to use an attorney.</p>
<p>Bay, I think the OP can distinguish their situation from the more complex ones like mine – but my advice stands. No one should EVER undertake being executor for an estate without at least consulting an attorney in the state where the deceased lived. Another note – estate attorneys are not always tuned into the laws of other states! So consulting an attorney in your state if in fact the decedent was a resident of a different state isn’t the best thing, you want an attorney with experience in the state where the deceased lived and the will is likely to be filed. (We haven’t talked about will filing, but even with small estates in many states there is a step required there – that is where the formal naming of the executor takes place, it is just a rubber stamp if it is uncontested).</p>
<p>OP, your attorney should be able to help you sort that issue of the gifts and any gift tax implications; you are probably okay, but you want to understand for sure from an expert. And if the gift is more than the annual allowed amount, you may need to file some form with your personal taxes (not sure, though), even though no one may owe any additional tax. Again… an attorney (and maybe your accountant) are the best people to consult on this. Stop trying to guess at what you should do and get that appointment made.</p>
<p>Also… if you make a personal gift (vs. the relatives receiving an inheritance), it may make a difference in if and how they report it on their taxes. They would not have to pay an estate tax. This is clearly not a large enough estate to incur a federal estate tax, but state laws vary widely (in that case it is the state of residence of the heir). My state of residence does not have an inheritance tax until a pretty large amount of inheritance is received. But my D lives in a state that taxes ALL inheritances. But… again… attorneys and accountants can help with the nuances of this.</p>
<p>lawfuture, I think you need to be clear what type of money is going to people. If it’s money they inherited outright, then it’s not “you giving” the money. If it’s coming out of that account that’s legally yours, then it may or may not be “you giving” the money. A estate lawyer will know the answer.</p>