Executor headaches

[JoeWras]

I am currently in this role. It is going OK due to incredible siblings. This is not always the case.

However, after seeing things on the other side of the family. DW and I have decided to hire professionals to be an executor if we should pass.

If one of us goes naturally, the other is the executor (a no-brainer, since most is joint accounts anyway). If both of us go (say an auto accident where we both perish -- not unusual!), we have stipulated a professional agency to do this.

It could cost up to 5% of our estate. WE DON'T CARE. It will save our siblings enormous pain.

 

[harley]

Just a thought. Since you have the discretion you might do the gift over a number of years so they don't blow it all at once or in a way that is something that you would approve of.

No, it's not going to be that big, like $25K each. Once it's theirs, it's up to them what they do. Hopefully I'll never even know. Just basing my previous comment on past behavior. Some people just don't make good decisions. Of course, that may be the pot calling the kettle black.

 

[Olbidness]

I guess what troubles me most is she uses the word "fair" when she says why the estate should pay the expense. Fair to whom I question. I don't think my stepbrother would agree with her assessment. To strengthen her case she adds that "I don't like him and he doesn't like me", as if to say ,because I don't like him he is not as worthy as me. She also seems to think it's "fair" that I pay a third also but uses the term "estate" like it's this thing and not someone else's pocket. I don't care about the money but the attitude of entitlement really annoys me.

She may truly be that short of money but that's not how she portrays it, simply a matter of "fairness". Sis and BIL live in a huge house. drive expensive foreign cars, so from outward appearances they are doing well.
It could be as they say where I live, "big hat, no cattle", but I don't think so.

As a side note I sure like being able to post on this forum. Very cathartic.

 

[Moemg]

Oldbidness , Sorry for your loss !

 

[Dimsumkid]

I've been in the executor role a few years ago. The situation you describe has no bearing on the estate. If you pay for your sister's travel expenses, you'll open yourself up to a potential lawsuit and then you'll need to explain it in your final estate accounting. Then you will need to get the money back and may need to file a court claim of repayment against your sister. Then if she decides not to pay, then start the collections process too. Trust me, I've been in this situation where I had to file claim in court to collect an estate over payment to a beneficiary. It's not fun and increases your stress level. The best thing I can suggest is to tell your sister that the probate judge won't allow travel expenses to be paid out since it wasn't specifically stated in the will. Then suggest that as a beneficiary she'll get proceeds when the estate is settled.

If things get worse, you can always petition the court to step down as executor and offer it up to your sister.

 

[Katiek]

Oldbidness, sorry for your loss, and I agree with the others who've said don't do anything that could expose you to a claim. It sounds like no matter what you do, your sister won't think it's enough.

Harley, how old are your brother's kids? If they're still minors, maybe you could do something to make sure the money at least gets used for their benefit (contribute to a 529 or make a gift in trust for them)?

 

[Olbidness]

I may just tell her that there is no way I'll reimburse her expenses from the estate, but after the estate settles she can tell me how much money she wants and I'll give it to her out of my part. Whatever she thinks is "fair".

 

[Meadbh]

I don't think you should have to pay for her travel out of your own pocket, unless she is in genuine financial need, which does not appear to be the case.

I found the link below. Be aware that it refers to Canadian law and may not be valid in your jurisdiction. It also seems to have come up while the testator was alive. But at least this question has been answered by a lawyer.

Estate Law Canada: How do I document an advance on an inheritance?

I wish Martha were still around!

 

[harley]

Harley, how old are your brother's kids? If they're still minors, maybe you could do something to make sure the money at least gets used for their benefit (contribute to a 529 or make a gift in trust for them)?

Nope, they're all adults, in the late 20s/30 range. Actually, SIL is the one least likely to do anything wise with the money. She went through a couple hundred $K in insurance money within 2 years after his death. I don't know the kids that well. One of them might have a head on his shoulders. The older one is delivering pizzas at age 30. It's just something I think I should do to be fair. After that it's their choice. I'm pretty sure if I had died before Mom and DB had still been alive, my DW and DD wouldn't have been in the will, and that would have been a crappy thing to do too. We put the Funk in dysfunctional.

 

[kcowan]

When my mother died, her will left everything to me. As Harley does, I felt that some people close to her deserved a gift. So I waited until the proceedings had been completed and gave the gifts myself "on behalf of my mother". They were very much appreciated.

Yes when my brother died, I gifted each of my boys $50k from his estate, representing it as their "inheritance". They lived in the same city as him and often helped him out. He had no wife or children. But my kids thought it was from him rather than me. It changed their lives, each in their own way.

 

[harley]

Yes when my brother died, I gifted each of my boys $50k from his estate, representing it as their "inheritance". They lived in the same city as him and often helped him out. He had no wife or children. But my kids thought it was from him rather than me. It changed their lives, each in their own way.

How'd you do it without hitting the gift tax limit? I think it's $14K per gifter now. I can do the $25K by DW and I each writing a check, but it would be nice to do like you did and make it look like it came from Mom instead of me.

Of course, feel free to take the 5th if necessary.

 

[Meadbh]

How'd you do it without hitting the gift tax limit? I think it's $14K per gifter now. I can do the $25K by DW and I each writing a check, but it would be nice to do like you did and make it look like it came from Mom instead of me.

Of course, feel free to take the 5th if necessary.

There is no gift tax in Canada.

TaxTips.ca - Gifts and inheritances - When are they taxable?

What's CRA's Position on Family Gifts? | FBC, Canada’s Farm & Small Business Tax Specialist

No 5th Amendment either!

 

[robnplunder]

Never heard of someone asking for a parent's funeral travel expense reimbursed. If she is destitute, I may understand. If not, tsk, tsk, tsk.

 

[TrvlBug]

I may just tell her that there is no way I'll reimburse her expenses from the estate, but after the estate settles she can tell me how much money she wants and I'll give it to her out of my part. Whatever she thinks is "fair".

If you do decide to do an advance on her inheritance, check the laws. My father had a court appointed trustee/executor. DB (deadbeat brother) saw the $$$ in his eyes and wanted a relatively small advance on his inheritance. As most was tied up in real estate to be sold, there was limited cash on hand. Executor said he had to advance to all 3 siblings or the other 2 had to approve the advance to DB. Don't know if it was CA law or CYA on executor's part.

 

[Idnar7]

It seems obvious, but why can't she just put the expenses on a credit card and make minimum payments until she receives her portion of the inheritance? I was out of state when my DM passed, but I never would have considered asking or accepting any compensation. What if there wasn't an inheritance involved? Would she not attend?

 

[Katiek]

Nope, they're all adults, in the late 20s/30 range. Actually, SIL is the one least likely to do anything wise with the money. She went through a couple hundred $K in insurance money within 2 years after his death. I don't know the kids that well. One of them might have a head on his shoulders. The older one is delivering pizzas at age 30. It's just something I think I should do to be fair. After that it's their choice. I'm pretty sure if I had died before Mom and DB had still been alive, my DW and DD wouldn't have been in the will, and that would have been a crappy thing to do too. We put the Funk in dysfunctional.

Would you consider giving the money just to the kids? His wife presumably got whatever inheritance/insurance your brother had, but the kids may not have gotten anything already. But of course it's your money, so be guided by whatever you think is right. It's very nice of you to do this, regardless of what they ultimately do with the money.

 

[Ally]

After my dad died, my brother was the executor of his estate. I learned things about my 3 brothers during the following year that I really didn't need or want to know. Estates and money seem to bring the worst traits out in so many people. As it is now, none of us intends to keep in contact with the brother who was the executor. We all were cheated out of items and money by him and we discovered that his wife was fired from two jobs for embezzling money during this time, so there is no telling what happened to the items and money he got. One brother thought about suing him, but in the end, we all decided to cut ties instead. It's too bad that distribution of estates can be so troublesome, but I hear it all the time.

 

[hnzw_rui]

It seems obvious, but why can't she just put the expenses on a credit card and make minimum payments until she receives her portion of the inheritance? I was out of state when my DM passed, but I never would have considered asking or accepting any compensation. What if there wasn't an inheritance involved? Would she not attend?

From the OP's other posts (big house, foreign cars), it seems like the sister can afford the fare. She just doesn't want to pay for it.

 

[Taxman59]

I had a client say that if he dropped a dollar bill on the floor, his daughters would fight over who gets it! This is about daughters who have 6 figure incomes from trusts. It is a sad world we live in.

 

[Texas Proud]

After my dad died, my brother was the executor of his estate. I learned things about my 3 brothers during the following year that I really didn't need or want to know. Estates and money seem to bring the worst traits out in so many people. As it is now, none of us intends to keep in contact with the brother who was the executor. We all were cheated out of items and money by him and we discovered that his wife was fired from two jobs for embezzling money during this time, so there is no telling what happened to the items and money he got. One brother thought about suing him, but in the end, we all decided to cut ties instead. It's too bad that distribution of estates can be so troublesome, but I hear it all the time.

And a sad part of this is that the brother who stole the money probably does not care in the least that you broke ties...

 

[marko]

I was the executor of my Dear Uncle's estate along with the help of our attorney. (You may remember his father, my grand dad from other posts! Charming people.)

He had made it explicitly clear on many occasions that 99.9% of his estate was going to his charities and that we should all plan on getting nothing! Harrumph!

Imagine everyone's surprise when we learned that his charities were bequeathed considerably less and the remainder (a comfy sum) went to the rest of us divided equally!

It sure avoided a lot of jockeying right up until the will was opened! No one was in any hurry.

"Here's your check...g'bye"

 

[EastWest Gal]

How'd you do it without hitting the gift tax limit? I think it's $14K per gifter now. I can do the $25K by DW and I each writing a check, but it would be nice to do like you did and make it look like it came from Mom instead of me.

Of course, feel free to take the 5th if necessary.

Uh, yeah, Harley is correct. The only way you can go over the amount is in a 529 plan; you can gift $70K and then gift nothing for the next five years.

Another way to gift larger amounts is that a gift can come separately from each spouse, and you can gift $28K by writing one check 12/31 and another on 1/1 of the following year.

Back to original topic. Since heirs will be receiving something anyway, they shouldn't expect expenses to be covered. It could be advanced out of their own inheritance, however, if there is the cash and all agree.

The executor should not personally pay anyone's travel expenses period. Why should they? An estate generally shouldn't either, except for the executor and/or trustee. If there is cash available and good accounting, one could advance the amount from an individual's inheritance, but check with an attorney. Make it clear it will be subtracted from their share. Have them submit receipts to you. Only the heir should get any reimbursement. Not their spouse or kids.

Until the will is executed, the estate probated, and the property transferred, in general the estate should only pay estate expenses. My process was long, involved farm property, IRAs, three investment accounts, and cash.

It's amazing how many people think that being an executor is easy, that you just get money and divide it up. I saved thousands of dollars by doing it myself but cost myself hundreds of hours writing letters, filling out forms, doing title searches and appraisals. I gave an accounting of the progress and the value of the estate to my sister periodically on a spreadsheet. It helped establish her trust in my process.


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[Car-Guy]

All three of us will receive an inheritance from the estate so I thought we would all pay our own expenses.

There's your answer. Sounds very reasonable to me.

 

[pb4uski]

Another way to gift larger amounts is that a gift can come separately from each spouse, and you can gift $28K by writing one check 12/31 and another on 1/1 of the following year.....

When we were gifting great auntie's residual money, one beneficiary would have received amounts that exceed the limit so I contacted her to see how she wanted to get it (over years, etc.) and she decided that she wanted us instead to split it between her and her (adult) children since she intended to give some of it to her children anyway. Problem solved!

 

[48Fire]

Timely topic for me. DW is executor for her mother who's health is failing, and I am helping with finances. Some property dividing is already being initiated by SIL and BIL doesn't trust her. I expect this to get much worse before it gets better.

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