Considerations For Executor

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Topic Author
pc95
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Joined: Sat Sep 17, 2011 9:26 pm

Considerations For Executor

Post by pc95 »

I have an old mentor from work whom I'm still close to recently ask if I was interested in being executor of his estate. He has
been retired almost 10 years, but we keep in contact fairly regularly. His wife is much older than he (more than 10 years), and he has offered generous compensation if I agree to it. They have a simple will and no children; all assets are in joint custody. He told me his current will leaves everything to his older sister, but
he does not want to burden her with being executor - so the change of will would leave beneficiaries mostly to his nephew and niece and part to myself. He has asked that in the event that his wife outlives him, she will need assistance in selling their house and moving into assisted living.
I very much respect my mentor, but am a bit afraid of what I might be stepping into, and feel awkward discussing a compensation figure which he would like to do. Is there anyone who has served in this type of capacity and could offer their opinions of possible difficulties or important considerations for being executor? I do not know anyone in his family besides his wife either. Thanks.
WhyNotUs
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Re: Considerations For Executor

Post by WhyNotUs »

The level of complexity varies by state law/taxation, scope and type of assets affected by the will, and nature of inheritors.

Sounds like his requests are larger than executor of will.
If house is held jointly and wife outlives him, it is not subject to will. One presents Death Certificate and the name changes solely to wife. Helping to set up sale of house, furnishings, and relocation are personal services outside of executor role, more like an informal trustee. Seems like someone really trusting you and asking for help to make sure that his wife has someone to lean on during a tough transition.

If you are a beneficiary of will, then serving as executor is still possible but you need to maintain an arms length from him making changes to will. Do not serve as a witness to new will and ask him to explain changes to other beneficiaries existing and proposed) now.

Don't worry about compensation unless it would create a strain for his wife. Serving as executor of an estate of any size or informal trustee is a part time job for a period of time and being reasonably compensated is fine. I used a book titled "How to Settle an Estate" by Charles Plotnick the first time that I did it and it helped. If you do not want compensation, you are not required to take it and can just do it as a gift. With or without compensation, sounds like your service would be appreciated.
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Topic Author
pc95
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Joined: Sat Sep 17, 2011 9:26 pm

Re: Considerations For Executor

Post by pc95 »

Thanks WhyNot for your reply. A will seems very personal and I do not want to cause a stir to his extended family, but at the same time I do not want to let
him down. He has been there many times for me with my work without question. To add, his wife does not handle and is incapable of handling finances, as she is also a stroke survivor. So you see, I believe this is really stepping into a potential large role (like you said perhaps beyond executor) which I dont have a problem with really, but my wife is unsure.
mayday23
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Re: Considerations For Executor

Post by mayday23 »

I think your mentor obviously values your friendship and thinks you will do a great job with it. He understands the burden and is willing to compensate you for it.

Unless you have any significant objections, I would do it. You're helping someone whose helped you before. As far as the compensation, i would accept it. After you complete the execution, you can determine if you want to keep the money or could just give it to charity.
Topic Author
pc95
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Re: Considerations For Executor

Post by pc95 »

Mayday, that's much of how I feel; I"ve told him I am interested and am happy to help - sort of signaling I will do it, but my wife is worried of legal ramifications or liabilities.
As WhyNot advised, keeping arms length is a good idea, so fair compensation is completely up to him, with as little bias/influence as possible. He mentioned meeting as a "brainstorming" session fairly soon, which I'm not exactly sure will entail, but he's the Captain in this situation which is how I will approach it.
Sparklebunny
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Location: East Coast

Re: Considerations For Executor

Post by Sparklebunny »

I know this is not really answering your question but I have to give my thoughts. If you care for him, tell him to visit an elder law atty. not a regular estate planning atty. when we have one spouse who is ill, like his wife, it's time to discuss long term care issues and how she will be cared for and how they will pay for it. You can also talk with that atty, if friend permits you, and essentially start buulding a team for this couple. Getting older is a team sport. What if your friend has a stroke? Who will care for him and his wife and how will that care be paid for? Now is the time to really start thinking about this. People plan for death, but rarely plan for incapacity. I do this with families everyday and prior planning always makes it easier. Check out www.naela.org for a list of elder law attys near you.
Topic Author
pc95
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Re: Considerations For Executor

Post by pc95 »

Thanks for your thoughts Sparkle, I may bring it up, although he stated he had Long Term Care and Health Insurance - in correspondence my friend uses the word "simple" quite often. Wanting a "simplified" situation for his wife. He has a "simple" will, and has said he's made things "simple" for himself. Does visiting an elder attorney keep to that theme? I just wonder.
Sparklebunny
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Re: Considerations For Executor

Post by Sparklebunny »

pc95 wrote:Thanks for your thoughts Sparkle, I may bring it up, although he stated he had Long Term Care and Health Insurance - in correspondence my friend uses the word "simple" quite often. Wanting a "simplified" situation for his wife. He has a "simple" will, and has said he's made things "simple" for himself. Does visiting an elder attorney keep to that theme? I just wonder.
Yes we can make it very simple and easy. But to be frank, once you have a spouse who is ill, you don't really have a simple situation anymore. I look at how long the ltci lasts, what's her income if he dies, what are her care needs and the cost of a facility to meet those needs, what if they both become ill, etc. it's just better to get all those questions on the table so you aren't scrambling in a crisis. I deal with families in a crisis everyday and I promise that thinking about this stuff ahead and planning ahead will make everyone's life so much better. And it doesn't have to be an ongoing thing. Get the power of attorney (critical!) in order, come up with a what if plan, find out all the options, then you're done until a life change occurs. But at least you've prepared. It's like when you prepare an emergency disaster bag for your house or car. You get all the supplies in there, tuck it away and then revisit to refresh supplies every couple of years.
Topic Author
pc95
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Joined: Sat Sep 17, 2011 9:26 pm

Re: Considerations For Executor

Post by pc95 »

I met with my friend today and informally accepted the offer of executor with additional dutie to assist his wife in the event of he dying prematurely/suddenly. I found out that he has an LTCI that will cover his wife for $110 per day of for the rest of her life should something happen to him; he also has the same coverage for himself. She also has her own social security payment of $1500 per month. He has a pension, an annuity, and a social security, together that cover his modest expenses. He said they actually save money still even in retirement. They also have approximately $300,000 in savings and a paid for house he reported worth conservatively $375,000 these days. Right now her care needs are she can take care of herself and is reasonably functional but cannot drive or deal with financials (bills/banks/money management) very well. He agreed that he ought to look up an elder attorney, and was taking for action in the next couple months. Discussing compensation was very easy as I completely left it up to him, and his offer was more than generous. I found it a bit difficult to talk about disastrous scenarios, as it kind of saddened my mood - much the same way when I discussed my own parent's trust. It brings up death into the forefront of thinking during conversation. Imagining loss is not fun.
jimkinny
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Re: Considerations For Executor

Post by jimkinny »

i was the executor for father. He did not have much, other than his house and some savings. I lived in another state.

I used the attorney/office that prepared the will. Other than selling the house and car it was simple.
If you live in fairly close to your mentor's home, it will be easy, if you use an attorney.

I think all you really will be required to do is to act as if the assets were your own by doing a competent and fair job of overseeing the dispersal of assets.

As to any activities outside the scope of the will, check with your mentor now and the attorney latter to make sure every thing is acceptable.

It was an honor to be trusted and not a burden.

jim
bsteiner
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Re: Considerations For Executor

Post by bsteiner »

There are two different issues here.

A responsible and honest person need not have any special skills to serve as executor. The executor can hire lawyers, accountants, real estate brokers, and other advisors. In many states, such as New York, the executor's commission (compensation) is fixed by law. In other states, if the executor and beneficiaries, can't agree, the court will fix the executor's commission.

The other issue is whether his current plan makes sense. If his wife isn't able to handle financial matters, then he might provide for her in trust rather than outright. His could give someone a power of attorney to help her handle her own assets. Your friend might also want to give someone a power of attorney to help him handle his affairs if he becomes unable to do so. He might provide for his sister and his nieces and nephews in trust rather than outright, to keep their inheritances out of their estates, and to protect against their creditors and spouses. All of this should be routine for a competent trusts and estates lawyer.
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