What is an executor, what does the job pay, and what can I do if I don’t want to do it?

Dear Len & Rosie,

A good friend of mine died last month, and I have just discovered that he named me as his executor. I haven’t the faintest idea what I’m supposed to do. I’m not an attorney, and I don’t know if I want to devote the time to it. I’m not even sure that I want to be executor. My friend is survived by his four adult children, two sons and two daughters. They have never gotten along with each other. I just know that they are going to start fighting over their father’s estate, which is worth over $500,000. Just last week they were arguing over who would get his stereo and television. What is an executor, what does the job pay, and what can I do if I don’t want to do it?

Edward

Dear Edward,

An “executor” is a person nominated in a will, and appointed by the court, to oversee the distribution of a decedent’s probate estate. The good news is that if you take the job, you get paid, and paid well. The probate executor (or administrator) gets paid the same fee as the probate attorney. In your case, a $13,000 statutory fee for an estate with a gross value (before debts are subtracted) of $500,000. If the estate is worth $1,000,000, you’ll get paid $23,000.

It will be your responsibility to gather the assets of your friend’s estate. You will need to publish a notice to creditors to ensure that those your friend owed money to shall have the opportunity to present their claims for payment. All of the assets in the estate have to be inventoried, itemized, and accounted for before the court will order you to distribute the estate in the manner provided for by your friend’s will. Your friend may have a final income tax return due next April 15th. The estate will also have to file an income tax return if it earns more than $600 of income during the course of administration.

Strangely enough, all of this is more or less routine, and most of the heavy living will be done by the lawyer you hire to probate the estate. The difficulty will come in if your friend’s children fight with one another over every little thing. Your friends possessions of sentimental value should be divided equitably among his children and, hopefully, they can do this on their own. If they are fighting over  the television, there’s an easy solution: Sell it to the highest bidder, or put it up for sale in an estate sale.

If you don’t like the idea of having to put up with your friend’s children, you can simply refuse to do it. They can’t force you to be the executor. If you feel your friend’s children are going to fight over the estate like dogs struggling over a bone, then the $13,000 fee may not be worth the hassle. If you do not want the job, the next executor named in the will should do it, or your friend’s children will fight for the privilege of being executor.

Len & Rosie

Should mom do a formal Estate Plan, or put everything into Joint Tenancy?

Dear Len & Rosie,

Mom is 78. She has some money, a little over $100,000, in a certificate of deposit and her checking accounts. She has put me on as a signer on all of her accounts. She lives in a trailer park. She owns her trailer, worth about $75,000, but pays rent on the pad. She wants to put me on the trailer so I could sell it if she got sick or worse. Can she do that? Would it accomplish her goal?

Lyn

Dear Lyn,

Your mother is trying to do her estate planning on the cheap. This isn’t such a bad idea, because she hasn’t got a lot of money, but it’s important for both you and her that she does it right.

If your mother gave you signature authority on her bank accounts, you will have access to her money, but only until her death.  If upon her death her accounts are worth less than $150,000, you can collect them 40 days or more after her death using a form provided by the bank or a declaration under California Probate Code section 13101. If the accounts happen to be worth more than $150,000, then her estate will be subject to probate in the courts. This would be expensive and time-consuming.

To avoid probate altogether, your mother can put her bank accounts and her mobile home in joint tenancy with you. It’s easy to do at the bank - the teller will do all the work for her, but it’s more difficult to transfer the mobile home. She will have to get transfer forms from the California Department of Housing and Community Development at www.hcd.ca.gov or have a title insurance company do the paperwork. But before she does this, she should check with the mobile home park. Many parks will not allow owners who don’t actually live there.

Putting you on title to her mobile home will make it easier after her death, but you wouldn’t be able to sell it without your mother’s signature unless she also gives you a Durable General Power of Attorney. She needs one, and she also needs an Advance Health Care Directive. If she should ever become incapacitated, there are all sorts of legal, financial, and medical decisions you may have to make on her behalf. Without a DPOA and AHCD, it could become necessary for your mother to be placed into a conservatorship, just to allow you to conduct business on her behalf. You can download a free Advance Health Care Directive at  www.lentillem.com.

Finally, if you are not the only child and your mother really wants to leave everything to you, then forget everything we said about your mother doing it herself. If your mother is planning on disinheriting her other children, she needs to see a lawyer, without you being there, to create a will to back up her putting everything into joint tenancy with you. If you were to get sued by vengeful siblings after your mother’s death, you’ll have a much better chance of winning if you’re not the only voice trying to convince the judge that your mother wanted to all to go to you. The lawyer and his or her staff will be neutral witnesses who can testify as to your mother’s wishes.

Len & Rosie