My mother in California passed away in early 2015. She and my father, who died in 1997, had an A-B Trust. The estate included her home. It was paid in full, but a mortgage was opened a few months before she died to pay for home health care expenses, farm property, a time share and personal belongings There are four children and one was designated the estate executor.
The bulk of the estate has been settled to everyone’s relief. My brother, the estate executor, hired a lawyer to navigate the process. The estate is still not completely settled 18 months later because of two factors: The time share — a last-minute revelation by the attorney — was not included in the trust and needs to go through probate court. Each of us sent a release of any interest in the time share.
I don’t dispute my brother worked very hard to settle my parents’ affairs. Honestly, I think executors should be entitled to something but wasn’t this a topic that required a discussion and agreement by all first?
The second reason the estate was not settled: $100,000 ($25,000 per child) was held back until my brother and sister and I “released” the executor (my other brother) from any future claims and/or contests against him or the estate. When we each found out about this withholding, it was through a letter from the attorney that was attached to a disbursement. We also discovered from the letter that my brother took an executor fee of $20,000.
The entire estate, once settled, will be about $600,000. My question is regarding the executor fee. Is that a standard practice? How do you determine the amount? I don’t dispute my brother worked very hard to settle my parents’ affairs. Honestly, I think executors should be entitled to something but wasn’t this a topic that required a discussion and agreement by all first?
Geraldine in California
First of all, good call on the timeshare. Earlier this year, I received a letter from Bob about his mother’s timeshare. Bob’s mother has attempted to sell the timeshare and even tried to donate it to her church. However, no one wanted it. You don’t want to be in the same boat (or condo, in this case).
Your brother has managed your mother’s estate for two years and — given the time and stress involved in managing a person’s estate — particularly when family is involved, $20,000 is probably not unreasonable. It’s a thankless job, except for the remuneration. Under California Probate Code, the executor typically receives 4% on the first $100,000, 3% on the next $100,000 and 2% on the next $800,000, says William Sweeney, a California-based probate attorney. For an estate worth $600,000 the fee works out at approximately $15,000. They usually take a year to settle, but can drag on for up to three years; this has taken two years.
It would have been helpful to everyone if your brother had been more up-front about the $20,000, how and why he came to that figure. That gives me some pause for concern, and makes me wonder if there is anything else that he might have dealt with surreptitiously.
Signing release forms at the end of this process is also pretty standard, but your brother needs to be transparent with all the transactions related to your mother’s estate. Have your own estate attorney look over the document, if you must. This is a relatively sizable estate and you want to ensure that there are no surprises and bad feelings down the road. For instance, it would have been helpful to everyone if your brother had been more up-front about the $20,000, how and why he came to that figure. That gives me some pause for concern, and makes me wonder if there is anything else that he might have dealt with surreptitiously. If do you have concerns, a legally binding release form should be very specific and, thus, give you a good idea of what to keep an eye out for.
If you are satisfied, enjoy your inheritance. As you say, your parents worked hard for it and they would want that for all four of their children.
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