Comments on: If You Are An Executor Of An Estate, It Might Be Better Not To Take An Executor's Fee http://wheredoesallmymoneygo.com/if-you-are-an-executor-of-an-estate-it-might-be-better-not-to-take-an-executors-fee/ A personal finance blog written by Preet Banerjee Thu, 09 Sep 2010 05:57:13 +0000 hourly 1 http://wordpress.org/?v=3.0 By: Preet http://wheredoesallmymoneygo.com/if-you-are-an-executor-of-an-estate-it-might-be-better-not-to-take-an-executors-fee/#comment-1921 Preet Sun, 30 Aug 2009 16:10:20 +0000 http://symbiantcapital.com/2008/04/08/if-you-are-an-executor-of-an-estate-it-might-be-better-not-to-take-an-executors-fee/#comment-1921 @ David Young - I'm not familiar with New York State, or American federal regulations in these matters. Unfortunately you'll have to do some digging. My (unverified) understanding is that you can charge a percentage as you go based on the qualifying transactions that are being processed as they happen. But again, best to check with a professional in your jurisdiction. @ David Young – I’m not familiar with New York State, or American federal regulations in these matters. Unfortunately you’ll have to do some digging. My (unverified) understanding is that you can charge a percentage as you go based on the qualifying transactions that are being processed as they happen. But again, best to check with a professional in your jurisdiction.

]]> By: David Young http://wheredoesallmymoneygo.com/if-you-are-an-executor-of-an-estate-it-might-be-better-not-to-take-an-executors-fee/#comment-1920 David Young Sun, 30 Aug 2009 00:04:38 +0000 http://symbiantcapital.com/2008/04/08/if-you-are-an-executor-of-an-estate-it-might-be-better-not-to-take-an-executors-fee/#comment-1920 I am an executor of an estate in New York State. May I take a partial disbursement of the executor fee in advance of closing the estate? I am an executor of an estate in New York State.
May I take a partial disbursement of the executor fee
in advance of closing the estate?

]]> By: Preet http://wheredoesallmymoneygo.com/if-you-are-an-executor-of-an-estate-it-might-be-better-not-to-take-an-executors-fee/#comment-1919 Preet Sat, 21 Mar 2009 01:35:50 +0000 http://symbiantcapital.com/2008/04/08/if-you-are-an-executor-of-an-estate-it-might-be-better-not-to-take-an-executors-fee/#comment-1919 @ Michelle: I think that is a question for your lawyer, and you should ask him/her ASAP. @ Michelle: I think that is a question for your lawyer, and you should ask him/her ASAP.

]]> By: Michelle http://wheredoesallmymoneygo.com/if-you-are-an-executor-of-an-estate-it-might-be-better-not-to-take-an-executors-fee/#comment-1918 Michelle Fri, 20 Mar 2009 14:11:48 +0000 http://symbiantcapital.com/2008/04/08/if-you-are-an-executor-of-an-estate-it-might-be-better-not-to-take-an-executors-fee/#comment-1918 We have hired a lawyer to start the paper work for probate. He did not ask if we were going to ask for executor fees and we were planing to. Is it to late? Michelle We have hired a lawyer to start the paper work for probate. He did not ask if we were going to ask for executor fees and we were planing to. Is it to late?
Michelle

]]> By: Preet http://wheredoesallmymoneygo.com/if-you-are-an-executor-of-an-estate-it-might-be-better-not-to-take-an-executors-fee/#comment-1917 Preet Mon, 25 Aug 2008 12:46:59 +0000 http://symbiantcapital.com/2008/04/08/if-you-are-an-executor-of-an-estate-it-might-be-better-not-to-take-an-executors-fee/#comment-1917 Hi Jean, I did indeed read your excellent post on the topic. The rules and regulations are indeed all over the map! I did some digging and found some guidelines for professional executor's fees (at least from our firm). You can see the comments in the linked post <a href="http://www.wheredoesallmymoneygo.com/the-benefits-of-a-professional-executor/#comment-2519" rel="nofollow">by clicking here.</a> Hi Jean, I did indeed read your excellent post on the topic. The rules and regulations are indeed all over the map! I did some digging and found some guidelines for professional executor’s fees (at least from our firm). You can see the comments in the linked post by clicking here.

]]> By: Jean Lespérance http://wheredoesallmymoneygo.com/if-you-are-an-executor-of-an-estate-it-might-be-better-not-to-take-an-executors-fee/#comment-1916 Jean Lespérance Mon, 25 Aug 2008 12:20:50 +0000 http://symbiantcapital.com/2008/04/08/if-you-are-an-executor-of-an-estate-it-might-be-better-not-to-take-an-executors-fee/#comment-1916 Hi Preet, Good post. I recently posted about the rules for executor fees allowed in various provinces and, as usual, they are all over the map. Some have a cap of 5%, like BC, while others like Ontario have a de facto guideline of 2.5-3%. In most cases, the Trustee Act allows a will to set out different fees, probably higher, than the legislated amount. I say probably higher since an executor can decline the job if they feel it will be too much work for too little pay. One reference I found mentioned that 3% is usually not enough for these days for professionals to do the job .... with your insider connections, Preet, maybe you could find out what the going rate is these days at trust companies? Executor fees are meant to reflect the amount and dfficulty of work involved, as well as the skill and results achieved, so an executor who feels they have been paid too little can apply to the court for more. Re Nicolas' comment about conflict of interest ... the law obliges such a person to act impartially. The other beneficiaries can take you to court if they don't like what you do. One source I found suggested that if the beneficiary-executor starts to see things get dicey, he/she should hire two lawyers, one to advise the beneficiary, the other to advise the executor! Maybe it helps to be schizophrenic? One other benefit a professional executor has in dealing with the various bureaucracies in government and financial services is the greater cooperation accorded to someone "in the business". Even if you know what you are doing, they assume you don't and if they are wrong (like one nameless discount brokerage that would not accept a testamentary trust account because they believed a separate trust document was required other than the Will), it is impossible to convince them otherwise. Hi Preet,
Good post. I recently posted about the rules for executor fees allowed in various provinces and, as usual, they are all over the map. Some have a cap of 5%, like BC, while others like Ontario have a de facto guideline of 2.5-3%. In most cases, the Trustee Act allows a will to set out different fees, probably higher, than the legislated amount. I say probably higher since an executor can decline the job if they feel it will be too much work for too little pay. One reference I found mentioned that 3% is usually not enough for these days for professionals to do the job …. with your insider connections, Preet, maybe you could find out what the going rate is these days at trust companies? Executor fees are meant to reflect the amount and dfficulty of work involved, as well as the skill and results achieved, so an executor who feels they have been paid too little can apply to the court for more.

Re Nicolas’ comment about conflict of interest … the law obliges such a person to act impartially. The other beneficiaries can take you to court if they don’t like what you do. One source I found suggested that if the beneficiary-executor starts to see things get dicey, he/she should hire two lawyers, one to advise the beneficiary, the other to advise the executor! Maybe it helps to be schizophrenic?

One other benefit a professional executor has in dealing with the various bureaucracies in government and financial services is the greater cooperation accorded to someone “in the business”. Even if you know what you are doing, they assume you don’t and if they are wrong (like one nameless discount brokerage that would not accept a testamentary trust account because they believed a separate trust document was required other than the Will), it is impossible to convince them otherwise.

]]> By: Preet http://wheredoesallmymoneygo.com/if-you-are-an-executor-of-an-estate-it-might-be-better-not-to-take-an-executors-fee/#comment-1915 Preet Wed, 09 Apr 2008 07:30:45 +0000 http://symbiantcapital.com/2008/04/08/if-you-are-an-executor-of-an-estate-it-might-be-better-not-to-take-an-executors-fee/#comment-1915 <p>Yes it can be a touchy subject. I recently had a friend who was both a beneficiary and executor of his father's estate. Luckily the family was tight nit and even-keeled. But I can only imagine if this situation ever arises with a family that are at-odds with each other...</p> Yes it can be a touchy subject. I recently had a friend who was both a beneficiary and executor of his father’s estate. Luckily the family was tight nit and even-keeled. But I can only imagine if this situation ever arises with a family that are at-odds with each other…

]]> By: Nicolas http://wheredoesallmymoneygo.com/if-you-are-an-executor-of-an-estate-it-might-be-better-not-to-take-an-executors-fee/#comment-1914 Nicolas Tue, 08 Apr 2008 23:59:27 +0000 http://symbiantcapital.com/2008/04/08/if-you-are-an-executor-of-an-estate-it-might-be-better-not-to-take-an-executors-fee/#comment-1914 <p>Salutations,</p><p>You are correct, the executor can pay reasonable expenses directly from the estate in order to accomplish his mandate. And, as you also mentioned, he must account for those to the beneficiaries (In order to make sure the expenses were reasonable).</p><p>You did raise one situation that raises an issue. It seems to me that being executor and beneficiary might raise potentially serious conflict of interest (unless you are the sole beneficiary of course).</p><p>Nicolas<br/></p> Salutations,

You are correct, the executor can pay reasonable expenses directly from the estate in order to accomplish his mandate. And, as you also mentioned, he must account for those to the beneficiaries (In order to make sure the expenses were reasonable).

You did raise one situation that raises an issue. It seems to me that being executor and beneficiary might raise potentially serious conflict of interest (unless you are the sole beneficiary of course).

Nicolas

]]> By: Preet http://wheredoesallmymoneygo.com/if-you-are-an-executor-of-an-estate-it-might-be-better-not-to-take-an-executors-fee/#comment-1913 Preet Tue, 08 Apr 2008 20:55:08 +0000 http://symbiantcapital.com/2008/04/08/if-you-are-an-executor-of-an-estate-it-might-be-better-not-to-take-an-executors-fee/#comment-1913 <p>Hi Mike, the estate would re-imburse the out of pocket expenses incurred by the executor and the executor should provide a statement of accounting for all the beneficiaries. But before doing so, I believe the executor can pay expenses from the estate directly (and provide accounting for such expenses accordingly as well).</p> Hi Mike, the estate would re-imburse the out of pocket expenses incurred by the executor and the executor should provide a statement of accounting for all the beneficiaries. But before doing so, I believe the executor can pay expenses from the estate directly (and provide accounting for such expenses accordingly as well).

]]> By: Four Pillars http://wheredoesallmymoneygo.com/if-you-are-an-executor-of-an-estate-it-might-be-better-not-to-take-an-executors-fee/#comment-1912 Four Pillars Tue, 08 Apr 2008 11:10:57 +0000 http://symbiantcapital.com/2008/04/08/if-you-are-an-executor-of-an-estate-it-might-be-better-not-to-take-an-executors-fee/#comment-1912 <p>Interesting post - I had no idea that the executor's fee was taxable income.</p><p>I would assume that they executor can claim expenses incurred in the line of duty?</p><p>Mike</p> Interesting post – I had no idea that the executor’s fee was taxable income.

I would assume that they executor can claim expenses incurred in the line of duty?

Mike

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