Please share your experiences being an executor

[Deleted]

My dad passed away October 2022. I am the executor of his estate.

He had three beneficiaries on his IRAs. They were disbursed into three separate Beneficiary IRAs. My entire account has to be emptied by the end of the 10th year. Whether or not RMDs are required is still TBD. Next week I have an appointment with a financial advisor.

My dad's will said I had first right of purchase for his house on 60 acres and a private lake (at market value). I was the only one that lived in the same town as Dad and was always there for him. After having the property appraised, I exercised that right. My sister is not talking to me. She hired her own lawyers that could not find anything wrong with the estate lawyer I am using. I am not fighting. I am doing everything as it should be done. Sister is just not happy with the will.

Will I take the 2% PR fee? Hell yeah! Sister is mad at me anyways. 

[Opti]

May 10, 2023 8:48:17 GMT -5 @blue said:

My dad passed away October 2022. I am the executor of his estate.

He had three beneficiaries on his IRAs. They were disbursed into three separate Beneficiary IRAs. My entire account has to be emptied by the end of the 10th year. Whether or not RMDs are required is still TBD. Next week I have an appointment with a financial advisor.

My dad's will said I had first right of purchase for his house on 60 acres and a private lake (at market value). I was the only one that lived in the same town as Dad and was always there for him. After having the property appraised, I exercised that right. My sister is not talking to me. She hired her own lawyers that could not find anything wrong with the estate lawyer I am using. I am not fighting. I am doing everything as it should be done. Sister is just not happy with the will.

Will I take the 2% PR fee? Hell yeah! Sister is mad at me anyways. 

PR fee, executor fee allowed by law in your state?

[Deleted]

May 10, 2023 9:03:43 GMT -5 Opti said:

May 10, 2023 8:48:17 GMT -5 @blue said:

My dad passed away October 2022. I am the executor of his estate.

He had three beneficiaries on his IRAs. They were disbursed into three separate Beneficiary IRAs. My entire account has to be emptied by the end of the 10th year. Whether or not RMDs are required is still TBD. Next week I have an appointment with a financial advisor.

My dad's will said I had first right of purchase for his house on 60 acres and a private lake (at market value). I was the only one that lived in the same town as Dad and was always there for him. After having the property appraised, I exercised that right. My sister is not talking to me. She hired her own lawyers that could not find anything wrong with the estate lawyer I am using. I am not fighting. I am doing everything as it should be done. Sister is just not happy with the will.

Will I take the 2% PR fee? Hell yeah! Sister is mad at me anyways. 

PR fee, executor fee allowed by law in your state?

2 percent

[skeeter]

May 10, 2023 8:48:17 GMT -5 @blue said:

My dad passed away October 2022. I am the executor of his estate.

He had three beneficiaries on his IRAs. They were disbursed into three separate Beneficiary IRAs. My entire account has to be emptied by the end of the 10th year. Whether or not RMDs are required is still TBD. Next week I have an appointment with a financial advisor.

My dad's will said I had first right of purchase for his house on 60 acres and a private lake (at market value). I was the only one that lived in the same town as Dad and was always there for him. After having the property appraised, I exercised that right. My sister is not talking to me. She hired her own lawyers that could not find anything wrong with the estate lawyer I am using. I am not fighting. I am doing everything as it should be done. Sister is just not happy with the will.

Will I take the 2% PR fee? Hell yeah! Sister is mad at me anyways. 

First of all, WELCOME!  It's always nice to see/meet new posters.

As for your post, IF I am understanding it correctly, you purchased your father's property fair and square according to his wishes in his Will and I am "assuming" the money you spent was put into his estate to be distributed equally to his three beneficiaries.

If my "assumption" is right, your sister will get/has gotten her share of the purchase price, so what is her problem?

p.s.

2% PR fee is very reasonable.  Here the fee is 5-6%.

[Deleted]

May 10, 2023 9:58:12 GMT -5 skeeter said:

May 10, 2023 8:48:17 GMT -5 @blue said:

My dad passed away October 2022. I am the executor of his estate.

He had three beneficiaries on his IRAs. They were disbursed into three separate Beneficiary IRAs. My entire account has to be emptied by the end of the 10th year. Whether or not RMDs are required is still TBD. Next week I have an appointment with a financial advisor.

My dad's will said I had first right of purchase for his house on 60 acres and a private lake (at market value). I was the only one that lived in the same town as Dad and was always there for him. After having the property appraised, I exercised that right. My sister is not talking to me. She hired her own lawyers that could not find anything wrong with the estate lawyer I am using. I am not fighting. I am doing everything as it should be done. Sister is just not happy with the will.

Will I take the 2% PR fee? Hell yeah! Sister is mad at me anyways. 

First of all, WELCOME!  It's always nice to see/meet new posters.

As for your post, IF I am understanding it correctly, you purchased your father's property fair and square according to his wishes in his Will and I am "assuming" the money you spent was put into his estate to be distributed equally to his three beneficiaries.

If my "assumption" is right, your sister will get/has gotten her share of the purchase price, so what is her problem?

p.s.

2% PR fee is very reasonable.  Here the fee is 5-6%.

Your assumption is correct. My sister will get money for her share of the property.

[Opti]

May 10, 2023 9:07:11 GMT -5 @blue said:

May 10, 2023 9:03:43 GMT -5 Opti said:

PR fee, executor fee allowed by law in your state?

2 percent

I'm curious what state. When my mom died, I don't know if that state had a limit. I think in NJ it was 4% at the time.

[haapai]

May I ask about how quickly your dad's IRA was disbursed into separate accounts?  Getting an idea of how quickly that can be done may be helpful for me in the future.  I would much prefer to be asking that question of a stranger when my parents are alive and well than asking in front of my brother when my parents are deceased or doing poorly. 

ETA:  Knowing how quickly that can be done and which steps must be taken to effect it may save both me and my brother quite a bit in taxes.  

 

[Deleted]

May 10, 2023 12:14:38 GMT -5 Opti said:

May 10, 2023 9:07:11 GMT -5 @blue said:

2 percent

I'm curious what state. When my mom died, I don't know if that state had a limit. I think in NJ it was 4% at the time.

2 percent in Wisconsin

[Deleted]

May 10, 2023 13:32:15 GMT -5 haapai said:

May I ask about how quickly your dad's IRA was disbursed into separate accounts?  Getting an idea of how quickly that can be done may be helpful for me in the future.  I would much prefer to be asking that question of a stranger when my parents are alive and well than asking in front of my brother when my parents are deceased or doing poorly. 

ETA:  Knowing how quickly that can be done and which steps must be taken to effect it may save both me and my brother quite a bit in taxes.  

 

I contacted the banks and financial advisors. They needed the beneficiary information and death certificate. Each beneficiary had to complete their own paperwork to get the Beneficiary IRA started.

For the CDs and beneficiary bank accounts, each beneficiary had to complete a W-9. PIA sister took months to do it because she was too busy.    Those funds could not be disbursed until they had W-9s from each beneficiary.

[Deleted]

Welcome aboard @blue.  Thanks for sharing your experiences here so we can all learn the tough stuff

[Deleted]

I should add: I had been doing my dad's income taxes for several years before he passed away. I knew what he had and where it was. The past few years he was not able to write checks or balance his check book; I was doing that too. I was very up-to-date on his finances.

[Opti]

May 10, 2023 16:20:38 GMT -5 @blue said:

I should add: I had been doing my dad's income taxes for several years before he passed away. I knew what he had and where it was. The past few years he was not able to write checks or balance his check book; I was doing that too. I was very up-to-date on his finances.

My sister did that for Mom for many years. She was her executor although now that she is moving out of state, I want to convince dad to realign his choices. He'll need to name my other sister as primary executor since she is in state. I'd like to be second as I think I'd do a good job and I know my other sister was exhausted by the care and the estate for mom and would like to opt out of this.

[haapai]

May 10, 2023 14:10:20 GMT -5 @blue said:

May 10, 2023 13:32:15 GMT -5 haapai said:

May I ask about how quickly your dad's IRA was disbursed into separate accounts?  Getting an idea of how quickly that can be done may be helpful for me in the future.  I would much prefer to be asking that question of a stranger when my parents are alive and well than asking in front of my brother when my parents are deceased or doing poorly. 

ETA:  Knowing how quickly that can be done and which steps must be taken to effect it may save both me and my brother quite a bit in taxes.  

 

I contacted the banks and financial advisors. They needed the beneficiary information and death certificate. Each beneficiary had to complete their own paperwork to get the Beneficiary IRA started.

For the CDs and beneficiary bank accounts, each beneficiary had to complete a W-9. PIA sister took months to do it because she was too busy.    Those funds could not be disbursed until they had W-9s from each beneficiary.

Thank you.  That's valuable information to know.  It's not exactly the information that I sought but it is almost certainly more valuable. 

[Deleted]

May 10, 2023 16:49:12 GMT -5 haapai said:

May 10, 2023 14:10:20 GMT -5 @blue said:

I contacted the banks and financial advisors. They needed the beneficiary information and death certificate. Each beneficiary had to complete their own paperwork to get the Beneficiary IRA started.

For the CDs and beneficiary bank accounts, each beneficiary had to complete a W-9. PIA sister took months to do it because she was too busy.    Those funds could not be disbursed until they had W-9s from each beneficiary.

Thank you.  That's valuable information to know.  It's not exactly the information that I sought but it is almost certainly more valuable. 

When you draw on your Beneficiary IRA you will receive a 1099-R to report as income on your taxes. This could bump you up into a higher tax bracket. You have 10 years to empty the account. The best bet would be to spread the disbursement out over 10 years. It won't be income until you draw on it - not when the IRA is retitled.

FWIW: When an increase in income moves you to a higher tax bracket, you only pay the higher tax rate on the part of your income that falls into that bracket. You don't pay a higher tax rate on all of your income. 

Is that how you want to save on taxes? 

[haapai]

May 10, 2023 16:58:19 GMT -5 @blue said:

May 10, 2023 16:49:12 GMT -5 haapai said:

Thank you.  That's valuable information to know.  It's not exactly the information that I sought but it is almost certainly more valuable. 

When you draw on your Beneficiary IRA you will receive a 1099-R to report as income on your taxes. This could bump you up into a higher tax bracket. You have 10 years to empty the account. The best bet would be to spread the disbursement out over 10 years. It won't be income until you draw on it - not when the IRA is retitled.

FWIW: When an increase in income moves you to a higher tax bracket, you only pay the higher tax rate on the part of your income that falls into that bracket. You don't pay a higher tax rate on all of your income. 

Is that how you want to save on taxes? 

Ummm, no.  That wasn't my plan or my thinking. 

I'm currently in the 12% federal bracket and working.  I'm single, over 50, and I usually land up with an AGI of about $26K a year, so I wouldn't move into a different tax bracket unless I took distributions from a beneficiary IRA in excess of about $16K a year and did not increase my traditional 401(k) and traditional IRA contributions.  Since I do not currently max either my 401(k) or my IRA,  I could increase my contributions to those accounts by about $26,750 a year.  So I could probably take distributions of about $42,750 a year before any portion of my income starts getting taxed by the feds at 22%.  I cannot imagine having a 22% marginal federal income tax rate.  I've never paid that rate in my life. 

So yes, it would take a fairly large beneficiary IRA to produce annual distributions larger than $42,750 a year if taken over a ten-year period.  It may shock you, given what I've said about my income, that there is a chance that my share may be that large. 

I wanted to know more about how long it took to get an inherited IRA into separate beneficiary accounts because I really like the idea of taking a distribution in the year of the original account holder's death.  This would allow me to empty the accounts in eleven different tax years instead of the ten that we usually talk about. 

ETA:  What I learned that was far more valuable was that a single beneficiary's foot-dragging can pretty much stop everything from happening but the clock will continue ticking. 

Is it possible that if your sister had delayed submitting the inherited IRA paperwork for long enough (until after 12/31/2023) you would have lost your option to split the beneficiary IRA into separate accounts?  The thought of someone being able to do that just blows my mind.

ETAII:  Oh fudge!  I've just figured out that I was looking at 2022 tax brackets when I composed this post.  I've since taken a gander at the 2023 tax brackets.  Holy indexing!  That's a big increase in how much taxable income I can have before paying 22% on the next bit.  I don't think that there's much chance of me inheriting a beneficiary account large enough to push any part of that income into the 22% bracket. 

The urge to delete or edit this post is quite strong.  Please learn from my foolishness and do not do the same.  It's costing me quite a bit of pride to leave this up. 

ETAIII:  There's another problem with the calculation that I have performed here.  I'm waaaay too embarrassed to point it out. 

[TheOtherMe]

In the case of my dad's estate, we had to wait for the two publications in the paper and then for the 90 or days for creditors to file or for anyone wants to contest the will.

Under the will my half sister did not receive much and she refused to sign any paperwork regarding the estate.

My sister and I signed this paperwork immediately.

When the attorney gave the go ahead, the IRA was split in half.  Yes, I had to sign my own paperwork for what I wanted done.  

I don't know if the IRA could have been distributed immediately if there was not a possibility the will would be contested.

[finnime]

We (5 of us) were each and all beneficiaries of my mother's IRA. Fidelity split the pot 5 ways and set up an IRA BDA for each of us with 1/5 of each investment in it. It worked fine. We each did need to work with Fidelity to get our information to them. I am not aware of any holdup any of my siblings could have caused had they waited on getting the paperwork done. THis was 20 years ago, though.

[wvugurl26]

The thing that stands out to me the most is that each state appears to be different in their requirements. For my grandma's that I'm currently handling, one notice was published in the paper and they get 60 days to make a claim. I'm about halfway through that period.

That is very frustrating to me. I know someone who lived in a different state than their parent. Had the parent lived in their state, they would have owed taxes on what they inherited. Since the parent's real property was in another state, there were no state taxes.

[Deleted]

May 10, 2023 19:47:19 GMT -5 haapai said:

May 10, 2023 16:58:19 GMT -5 @blue said:

Is it possible that if your sister had delayed submitting the inherited IRA paperwork for long enough (until after 12/31/2023) you would have lost your option to split the beneficiary IRA into separate accounts?  The thought of someone being able to do that just blows my mind.

The CDs and savings accounts could not be distributed until my PIA sister gave them her W-9.

The IRA was different. As soon as I submitted my paperwork, it was split into my own Beneficiary IRA. The next month my other sister submitted her paperwork and her portion was disbursed.

PIA sister still has not submitted her IRA paperwork so that portion is still in my dad's name. (She is too busy.) That is part of the reason I am meeting with the financial advisor next week. Dad is deceased and should not have an IRA. He still gets a statement every month.

Wisconsin must have three months after notice is posted to file claims. The hospital filed a claim that is more than Dad's maximum out of pocket expense was. I am dealing with his health insurance company and the hospital to get this settled before the estate pays the claim.

Dad had long term care insurance that covered his 2-1/2 months of assisted living. That was nice. Getting them to pay was like pulling teeth but they paid.




 

[haapai]

Thank you for clarifying. 

[ripvanwinkle]

I was the executor of moms living trust. It turned out to be a nightmare. She didn't have much. Just the house worth $100K, bank account for $3000 and a small annuity $10K. I have 2 older sisters. Sister #1 lived on in Montana and sister #2 lived in Hawaii. I lived 60mi from mom. Mom developed a brain tumor and they couldn't get it all out and she passed 8 month later in 1995. When mom went into a nursing home and then hospice sister #2 arrived with her 4 cats and took up residence in the family home.

I contacted the attorney who made trust and he walked me through what I had to do and I started the needed things. #1 and #2 and I meet and talked the trust over. It said I was to liquidate the trust and disperse the proceeds. That entailed selling the family house. Montana sister said that's fine. Same with me. We picked out things we wanted. Hawaii sister said no way. "I have no place to go back to and Hawaii 6mo quarantine on her cats".

She got a lawyer involved to contest the trust and the trust lawyer helped us and we finally settled after 1yr. We made her buy us out. Didn't talk to her for 5 yrs.

[TheOtherMe]

Why would you assume you get the family home?

My aunt and uncle had a living trust.  It named all 5 children as co-executors.  So they had to take votes on everything.  Most things were easy to let go.  They didn't want the house  or the acreage it sat on.  The big deal was the 50 acres of farm land that had been rented to the same person.  

They voted.  First vote was 2-2 with the deciding vote wanting more time to think about it.  He finally voted to see and his brothers were very disappointed.  The other 2 in favor of selling were a son living on small SS and Medicaid in low income housing and a sister who was currently in drug rehab.  The one who had to think about had recently remarried and both he and his wife had filed bankruptcy before they married.

Now the son living on SS has died so they are back to 2-2 on any votes left.  The trust was set up so the one on SS was to receive X number of dollars a month for the rest of his life.  I don't know if the remaining money now goes to the remaining 4 or if it goes to his two sons who are equally irresponsible with money.

[dannylion]

When my father passed away, I looked up what was required to settle an estate in his state.  After perusing all the filings, deadlines, documents, tax issues, and everything else involved, I said to myself "Well, that's not going to happen," and hired an estate attorney.  Best money I ever spent.  Everything got done, and it was done properly and on time.  All I had to do was sign things and write checks.  

[ripvanwinkle]

May 13, 2023 10:22:04 GMT -5 TheOtherMe said:

Why would you assume you get the family home?

My aunt and uncle had a living trust.  It named all 5 children as co-executors.  So they had to take votes on everything.  Most things were easy to let go.  They didn't want the house  or the acreage it sat on.  The big deal was the 50 acres of farm land that had been rented to the same person.  

They voted.  First vote was 2-2 with the deciding vote wanting more time to think about it.  He finally voted to see and his brothers were very disappointed.  The other 2 in favor of selling were a son living on small SS and Medicaid in low income housing and a sister who was currently in drug rehab.  The one who had to think about had recently remarried and both he and his wife had filed bankruptcy before they married.

Now the son living on SS has died so they are back to 2-2 on any votes left.  The trust was set up so the one on SS was to receive X number of dollars a month for the rest of his life.  I don't know if the remaining money now goes to the remaining 4 or if it goes to his two sons who are equally irresponsible with money.

Sister #1 and I didn't want the large 4 bedroom house and full finished basement and having our name on the deed and dealing with taxes and sister #2 said "you can't sell the home we grew up in"!!. The house was paid off and sister #2 wanted to live there because she didn't have a place in Hawaii to go back to. We both said she could live there until the home was sold and she could take her share and find a new place she could live with her cats.