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may serve as executor of a decedent’s estate. The executor is entitled to a statutory commission, payable on a sliding scale. The scale is as follows:
5% of the first $100,000.00
4% of the next $200,000.00
3% of the next $700,000.00
2.5% of the next $4,000,000.00
2% of all monies in excess of $5,000,000.00
As you can see, even a modest estate will yield a substantial commission for the nominated executor. Your executor will be in charge of collecting your assets, discharging your debts, and distributing your assets as per the terms of your will. As such, the job is very important, and should be given to someone who is responsible, trustworthy, and meticulous in their record keeping.
If you have been nominated as the executor of a friend or family member’s estate, be mindful in your duties, and keep excellent records of all expenditures made on behalf of the estate. By doing so, you will honor the legacy of your loved one, assist their heirs in their time of need, and protect yourself from potential liability.
Trusts
There are dozens of varieties of trusts, each of which can be used to accomplish different goals. For most circumstances, however, your attorneys will recommend one (or several) of three variants of trusts - the basic revocable living trust, the irrevocable “Medicaid” trust. Each trust serves its own specific purpose - generally, irrevocable trusts are for asset protection and estate tax purposes, where revocable trusts are considered “will substitutes”.
Revocable Living Trusts
A revocable living trust (“RLT”) is a so- called “will substitute” - it is freely revocable during your lifetime, and you
(and your spouse, if a joint trust) may act as trustee(s) of the trust. RLTs have many advantages - they simplify estate administration, avoid the necessity of probate, and serve special purposes for those who own property in multiple states. An RLT, like any trust created during the grantor’s lifetime, is its own legal person. By setting up an RLT, you will effectively begin administering your own estate during your lifetime. This means that when you pass away, your successor trustees will step immediately into your shoes, without having to go through the length process of probate. Administratively, the only thing for your family to do, will be to have your successor trustee(s) begin managing the trust’s affairs, and disposing of the trust assets as per your directions.
A common circumstance that is encountered in New York is the elderly decedent who owns both their long time New York residence, and a Florida condominium for their retirement years. In these circumstances, without an RLT, the family of the decedent will have to probate the decedent’s will (or, in the absence of a will, bring an administration proceeding) in both New York and Florida. After accounting for filing fees, legal fees, service of process, and the potential necessity for travel, this can more than double the cost of administering the estate. By utilizing a RLT, you can avoid these problems, save money and time for your heirs, and leave a lasting legacy for your family. Almost without exception, we advise that our clients who own real estate or other property in multiple states utilize an RLT for estate planning purposes.
Irrevocable “Medicaid” Trusts
The irrevocable “Medicaid” trust is a special type of trust utilized to protect your assets - and in some cases, make you eligible for government benefits - in the event that you require certain forms
Page 34 - McManus-Lorey Funeral Home