I know you keep insisting probate is not a big deal.Most people name their spouse or children who usually don't take executors' commissions.Even if probate is not difficult in a specific state, wouldn't one want to reduce executor costs by using TOD or a trust? I'm looking at a PA bank's executor fees for assets that go through probate and they start at 5% for the first $500K and work up to 3% for $1M to $10M.
Someone other than a spouse or child who was intending to take commissions can refuse to accept the appointment.
A bank will usually include nonprobate assets in their commission base (though sometimes at a lower rate).
Revocable trusts are not commonly used in Pennsylvania.
There are many reasons not to name beneficiaries other than for life insurance and retirement benefits.
Trustees of trusts are entitled to annual commissions, as well as a commission on paying out assets.
I thought I would relate a situation an acquaintance of ours is going through right now.
Married couple with one child, no previous marriages, fairly simple financial situation. The husband died suddenly. Unfortunately he named his estate, rather than his spouse, as the beneficiary of his IRA. Everything else is either jointly owned, or had spouse as beneficiary. Without this IRA, no probate would have been required.
But, now she is forced to go through probate. It is in a state that has adopted the Uniform Probate Code, so things should be simple, right? So far, she has talked to 3 estate attorneys. Each on has said the fees will be around 5-7% of assets, including non-probate assets! Perhaps, she will be able find a firm willing to work on an hourly basis, or not include non-probate assets. But, this is absolutely a stressful situation she does not need while she is grieving.
Despite what I keep hearing about how simple probate is, I am certainly planning to do whatever I reasonably can so that my wife is not faced with type of situation.
I really don't understand why anyone would intentionally subject a grieving spouse (or children) to this additional responsibility if it can be avoided with fairly easy planning up front.
Statistics: Posted by marcopolo — Mon Apr 08, 2024 2:40 am — Replies 70 — Views 4913