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Executor Fees and Accountability

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L

luluf

Guest
How are the Executor fees determined in New Jersey if an estate has only cash and simple stock?
How difficult is it to prove Executor misconduct?
Executor wrote a check to self and another beneficiary and cashed after death. There are two other beneficiaries. What is the courts view on gift checks cashed after death?
Executor gave estate items to benefit own family and that of another beneficiary and is lying about it--what can be done?
What does a formal accounting involve?
Thanks
 


A

advisor10

Guest
FEB. 21, 2001

DEAR LULUF:

Executor fees in New Jersey are calculated at 5% of the first $100,000, then 3% of any excess up to $1,000,000.

With stock, the executor has to decide if he wants the stock to be sold or not sold (if he thinks the stock might reasonably be expected to increase in value in the future).

Please clarify what you mean by a check "cashed after death". An executor does not officially receive that title until after a person dies. Do you mean that someone who knew he was named as an executor (in someone else's will) knew about this fact and was handling that person's financial affairs while the person was still living? And that this is when the gift checks were written? If so, then that is perfectly acceptable, since people can designate gifts to anyone they want to at any time.

The executor has the authority to distribute personal property as he sees fit unless there were specific instructions in the will or listed on a separate page about the specific distribution of specific items. Nothing much can be done about this.

Formal accounting would consist of something similar in format to an income statement or balance sheet, with all asset amounts added up to a total, from which would be deducted all estate expenses, with what is left over probably the amount to be distributed to heirs. Along with the formal accounting would be any receipts, copies of tax forms, copies of checks distributed, bills paid, etc. as supporting documentation that would be filed at the county courthouse along with the will.

SINCERELY,

[email protected]
 
A

advisor10

Guest
FEB. 22, 2001

I apologize for having given an incorrect figure on my Feb. 21st posting: the correct amount for executor fees in New Jersey is 5% of the first $200,000, not $100,000.

[email protected]
 
L

luluf

Guest
[email protected]
Thanks for your reply.
It is believed that the deceased signed several blank checks prior to death to be used to pay bills. The executor's name was placed on the accounts one week prior to death. The executor back dated 2 checks in the amount of $20,000 each given to self and another beneficiary ( 2 other beneficiaries were to share in the estate "share and share alike, equally") The Executor alluded to gifting $40K to avoid inheritance tax -but said it would be $10K to each beneficiary. The checks were not cashed until after the deceased was buried. The deceased made it a point to inform the 2 other beneficiaries how much cash was in the estate prior to death.

Additionally, the Executor refused to provide the 2 other beneficiaries statements showing assets of the estate. The attorney refused as well and they had to obtain their own attorney to obtain these documents. 9 months after death the 2 other beneficiaries found out that $40K had been removed from the estate. --ergo the "gifts", the two other beneficiaries believe, were bogus.

The will states "share and share alike"-- how can the executor distribute personal property to anyone other than the beneficiaries and not be held accountable for this action? Are they allowed to benefit themselves and their family members?

With respect to the stock, the stock has increased in value since death therefore it would be beneficial to the two other beneficiaries to have the equal number of shares transferred rather than selling the stock thereby accruing a capital gain. Is the Executor the sole decision maker?
Thanks
 
A

advisor10

Guest
FEB. 24, 2001

DEAR LULUF:

These executor's actions may not necessarily be misconduct but using the excuse of trying to devise a "tax strategy" that is good thinking, but deceiving since he made the amounts for more than what he previously stated. If you can prove that the beneficiaries are bogus, it might be worth it to report this (by letter) to the probate judge so that a hearing can be held to discuss/review this matter, because it may affect the amounts that are eventually distributed to the beneficiaries. But first, I would discuss this with a tax accountant or post a question to the tax law forum board.

You would have to speak specifically with a Georgia probate attorney to find out whether it is required that beneficiaries be notified, or look up the probate code at your local library.

You didn't mention how long ago the person died, but you should go to the county courthouse (of the city where the person died) to find out whether or not the will has been filed yet and whether the estate is still open or closed. There may be documentation already submitted that would give you a clearer picture of the financial affairs, although I'm guessing that since this executor is doing things "shadily" that he probably has not submitted very much paperwork yet and won't do so until all affairs have been handled/closed.

The executor does have sole discretion as to how stock and personal property are handled.

SINCERELY,

[email protected]
 
A

advisor10

Guest
FEB. 24, 2001

I should have also mentioned to you that you should try to find out from the probate court clerk at the courthouse whether it is a requirement for executors to be bonded. If they do require it, then any monies that were misappropriated or stolen from beneficiaries can be recovered from the bonding company.

[email protected]
 

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