Dropping co-executor status could expedite settlement

Dear Bruce: My mother died and left my older brother and I as co-executors of her estate. We are the only two heirs. The problem is that I recently moved to another state, and my brother wants me to sign papers so that I would relinquish my status so that it will be easier to clear up the estate. Otherwise, according to the lawyer, every bill that has to be paid will have to be mailed to me for a co-signature. I hate the thought of relinquishing the co-executor status, but I don’t know if I have another choice. May I have your thoughts? – Reader, via e-mail

Dear Reader: Do you trust your brother? If so, is he competent? If both of the answers are yes, then why not turn the estate over to him? If, on the other hand, you feel that your brother might be tempted to make decisions that might favor him, then insist upon the documents being sent to Florida. In today’s world, with overnight delivery, while there will be some small cost, there would be relatively little time delay.

Dear Bruce: How do I protect myself from my husband’s debt? – Reader, via e-mail

Dear Reader: In nine words you have asked a very profound and deep question, and there is no absolute answer. First, it depends upon what you have signed during your marriage. Generally speaking, a husband and wife are both considered liable for debts incurred during the marriage. Divorce, of course, is one way to at least delineate who’s responsible for what, but even if the courts decide that he’s responsible, as far as the creditors are concerned, you are very much on the notes. Sometimes bankruptcy is the only answer. If you are as concerned as you appear to be, you really should consult an attorney in your state and find out precisely what you can be doing now to protect your interests. Time is very much your enemy – get on it.

Dear Bruce: Is it possible to settle an estate without an attorney? It’s a small estate – $20,000 plus a car. The executor goes to probate and is setting up an estate account to pay bills, which will take most of the money. We are trying to avoid attorney’s fees. What are the rules for settling an estate? – L.J., Lexington, Ky.

Dear L.J.: There’s no question the estate can be settled without the services of an attorney, as long as the executor is willing to do the legwork. Most of the information you will need can be obtained at the surrogate’s office. Depending on the state, you may be required to advertise the closing of the estate and notify all creditors. In the event there’s not sufficient funds to satisfy all the creditors, then a surrogate will help you determine who gets paid and how much. On a small estate of this kind, there shouldn’t be any difficulty in handling this on your own.

Dear Bruce: My son and I have come up with a neat bracket to hold materials when we are working out in the shop. I don’t want to say more, because I don’t want to blow the idea. We can make a mock-up of the bracket, but we don’t have money for the patent. The first lawyer that I called said that it would cost me $800 just to come in and talk to him. We don’t have that kind of money to waste. One of my friends suggested that we take pictures of the mock-up, describe it in detail, put it in an envelope and send it to ourselves via registered mail, and not open the envelope when it comes. Would that protect us in the event someone steals our idea? – M.J., via e-mail

Dear M.J.: I have heard of this for many years, but it is pretty tough to get anyone in the legal business to say that this would be an adequate defense. It certainly can’t hurt you. If you have something that is really worthwhile, and if it is of a mechanical nature as this appears to be, the only legitimate way to protect it is to first have a preliminary search done to be certain that no one got there first, and then have the item patented with the U.S. government. None of these things are easy, and they are costly. This is why so many ideas wither on the vine.

Dear Bruce: I have been named executor and beneficiary of my cousin’s estate, worth approximately $450,000. Do I need to claim on my federal income tax return the net money after all estate inheritance taxes are paid? I was told that you only have to claim “earned income” on a tax return. I am retired and on Social Security. – Reader in Pennsylvania

Dear Reader: Unless your cousin has already claimed against his lifetime exemption, there will be no federal income tax as there is a $1 million exemption. The estate may have to pay some money to the Commonwealth of Pennsylvania, but you as an heir have no tax responsibility. Any and all taxes in estate matters are to be paid by the estate before the money is distributed. Once the money is in your account anything that it earns in terms of interest or other income is taxed at whatever your marginal rate is. You would be taxed if you collected a fee for being executor, but in this instance that would be foolish.

Bruce Williams is a national radio talk show host and syndicated columnist. He can be reached at bruce@brucewilliams.com.[[In-content Ad]]