Sorry to drag this out, but in the instance of "intestacy", that is dying without a Will, an Administrator is appointed by the Probate Court. In some states, it is called a Personal Representative. In Ohio, it is called an Administrator.
Rich
Alton Junction
I have been an Executor for a few people and have never taken a fee as it is taxable income. I get the beneficiary to gift me the money after the Estate is settled. I am taking a chance of not getting paid but that has never happened.
I recently turned a part of an Estate over to the State of Washington. It was items worth about $35,000.00. Without going into detail it was going to cost an estimated $50,000.00 to clean up the mess in legal fees to free it up.
If there is no Will there is no Executor, until the State (court) appoints one. If there is no Executor you cannot dispose of anything that requires a legal signature such as a car, house, bank accounts, or investments.
As an Executor, it is not my job to sell off the possessions of someone myself. I usually call in the Beneficiaries and let them take what they want, then call in the auction house to take what they can sell, then call the Real Estate company to sell the house and leave it up to them to have what's left taken to the dump and prepare the house for sale.
As an Executor, it is my job to see that it is done, not hold garage sales. I had an Estate where the house was sold as was with all contents still in the house. The person had been removed to the hospital where they died shortly afterward. I removed important papers and had someone empty the fridge. It took a year to get it sold due to legal delays associated with the pandemic. All the clothing, food, TVs, other electronics and appliances, and furniture were still in place. The dishes were still in the cupboards, it was as if the person walked out the door and never came back, which is basically what happened. The beneficiary did not want the belongings as they did not live locally and the economics of disposing of them other than including them in an "as is, contents included" sale did not make sense.
I am no legal expert by any means, but people don't know what they don't know when it comes to Estate planning and unless you really don't have anyone you care about that may have to take care of your affairs after you die and are quite content to let the Government look after things, having a will in place is the considerate thing to do. I get calls sometimes from people that want advice on how to deal with a loved one or friend's Estate where they did not have a Will in place. All too often the best way to deal with it is to just walk away.
The Government often cremates and/or buries people with means just as they do a homeless person just because that person had no Will in place with an Executor named that could access their bank account to pay for the services of a funeral home. As an Executor the first thing I have to pay for is the Funeral Service, it ain't coming out of my pocket. I just go get it out of the bank account of the deceased.
Brent
"All of the world's problems are the result of the difference between how we think and how the world works."
BATMAN I have been an Executor for a few people and have never taken a fee as it is taxable income. I get the beneficiary to gift me the money after the Estate is settled. I am taking a chance of not getting paid but that has never happened.
I am not a lawyer or an accountant, but my layman's guess is that would still be taxable income. It's off the books so it would be hard to prove, but I think the IRS would say it is compensation for a service rendered and would expect their cut.
I recently turned a part of an Estate over to the State of Washington. It was items worth about $35,000.00. Without going into detail it was going to cost an estimated $50,000.00 to clean up the mess in legal fees to free it up. If there is no Will there is no Executor, until the State (court) appoints one. If there is no Executor you cannot dispose of anything that requires a legal signature such as a car, house, bank accounts, or investments.
In Ohio, the executor has the power to do all those things. My dad had moved into a retirement home and didn't have a lot of personal property left, other than his car. He had already donated a good chunk of his personal library to Ohio State where he worked for 25 years. The rest of his books were willed to them. The rest I disposed of in a garage sale with the proceeds going to the estate. His investments had all been placed in his trust and I was able to distribute those free of the estate but it was all still subject to the death tax.
My brother wanted my dad's car to give to his daughter so I signed that over to him and we deducted the blue book value from his share of the liquid assets.
As executor, I could outsource many of the tasks but that would cost the estate money and since I was also one of the heirs, it was in my interest to do most of the tasks myself. I had to pay the lawyer of course and we had to get an appraiser for some of his assets and he was paid a fee as well.
That would depend on the size of the estate. I retired early and went through the lion's share of my investment portfolio before I reached the age where I could draw my pension and Social Security. My biggest asset is my house which has a reverse mortgage. That will have to be sold within a year to pay of the mortgage and the heirs get the rest. It won't be a lot of money since it will be split about 13 ways, but it's better than nothing. I have a lot of personal property that will have some value at an estate sale, two cars, two TVs, golf clubs, guns, appliances, etc. in addition to the trains. None of it by itself will sell for that much but collectively it will be a decent amount. Nothing to walk away from.
The Government often cremates and/or buries people with means just as they do a homeless person just because that person had no Will in place with an Executor named that could access their bank account to pay for the services of a funeral home.
That is the least of my concerns. For all I care, they can throw me out with the trash.
As an Executor the first thing I have to pay for is the Funeral Service, it ain't coming out of my pocket. I just go get it out of the bank account of the deceased.
Both my parents were cremated and it was prepaid. There was a modest cost for the church service and a reception afterward. I can't remember whether I paid that out of the trust or estate funds.
John-NYBWI am not a lawyer or an accountant, but my layman's guess is that would still be taxable income.
I am in Canada and the tax structure is quite different as I found out being the Executor for a couple of Americans that had moved to Canada. I was very careful about checking with the accountants and lawyers about receiving a "gift" after the fact and it is quite legal and is done that way most of the time.
Having done the Estates of two Americans, I had to do a lot of work through the U.S. Consulate in Vancouver. They are awesome to work with and take you through the whole thing step by step. I also had a direct line to a person at the IRS and she actually phoned me often as things progressed along. Very easy process all in all but just took time.
I had to move a lot of money North of the border from seven different financial institutions in the U.S. The Tax treaty between the two countries makes things easy. The beneficiary was Canadian.
John-NYBWMy biggest asset is my house which has a reverse mortgage.
My Father-in-law lost his retirement fund through mismanagement and needed a reverse mortgage to live. He was about to pay 6.5% for it, however, I found out and got him a private lender @ 1.85%. Registered and legal. Made a big difference over the past 18 years.
BATMAN John-NYBW My biggest asset is my house which has a reverse mortgage. My Father-in-law lost his retirement fund through mismanagement and needed a reverse mortgage to live. He was about to pay 6.5% for it, however, I found out and got him a private lender @ 1.85%. Registered and legal. Made a big difference over the past 18 years.
John-NYBW My biggest asset is my house which has a reverse mortgage.
I've had my reverse mortgage for 7 years and property values have increased significantly in that time but not enough to make it worthwhile to refinance it. I have a line of credit with mine and it is there as emergency funds. Last year my reverse mortgage company offered me a re-fi but it wouldn't have made much difference to my line of credit. Most of the additional funds would have gone to paying the new closing costs which is why they wanted me to re-fi. A good deal for them. A bad one for me. I might re-fi someday if I can at least double my line of credit. Until then it won't be worth it.
Back to trusts in stuff, in mine everything not specified goes into the trust automatically, I mean everything.