Seek counsel to determine appropriate estate fees

Dear Bruce: I have a friend whose mother died, leaving everything to three adult children in her will. She had a 401(k) worth $15,000. The lawyer told them the only way 401(k) money can be released is to set up an estate account, and the money would be deposited into the account. The lawyer is charging $1,000 plus 2 percent to set up the estate account. They are told they will be left with about $10,000. This sounds like highway robbery to me. I collected on a spouse’s 401(k) after death with no charge involved. I just called the company, and they sent me a check. – Reader, via e-mail

Dear Reader: Although state laws and contracts vary, it would seem to me these charges are excessive. I don’t know how we got from $15,000 to $10,000. There are likely some inappropriate fees. Is the executor of the estate willing to do the legwork? If so, you could hire an attorney for $150 an hour. Surely, there is nowhere near $5,000 of work in this estate. I’d find a new attorney, were it me, and contact the mutual fund directly.

Traffic ticket misses culprit

Dear Bruce: We received notice of a traffic violation in the mail for an infraction in another state almost 1,000 miles from where we live. We have never been in that state in our lives, and neither has our automobile. The license number on the ticket is our license number, except that one digit is off. The description of the car itself is nothing like ours. When I called the violations bureau, the lady on the other end said that she’d heard the same story before, and that unless we pay the fine, the bureau will contact our state Motor Vehicle Department to have our licenses suspended. Can they do this? How should we handle it? – Reader, via e-mail

Dear Reader: Would you believe that I had a similar situation some years ago? I’m sure that these people have heard it all, but they also are refusing to admit that they make mistakes, as they did in my case. I would photocopy the car registration showing the correct license plate number. I would write a letter to the violations bureau in the other state with a copy of the letter going to the motor vehicle department in your state explaining that you have never stepped foot in that state, the summons was issued to a different automobile, and that the officer apparently took down the wrong license plate number. That should do it. In the event that they continue to pursue it, you would be advised to notify your local Congressman or state senator, putting them on notice that if there’s this kind of problem with your license being suspended, they can intercede for you. I know it’s a nuisance, but there is no other way to get around this.

Separate assets require separate attorneys

Dear Bruce: I have a grown daughter from a previous marriage, and my wife has two children of her own, also from a previous marriage. We currently rent our home and do not own any property jointly or individually. We have been told we need to draw up separate durable-power-of-attorney documents to control our spouse’s finances in case either of us become mentally or otherwise incapacitated.

We are reluctant to open joint savings and investment accounts. We do not want the money in the various investment and savings accounts to pass on to our spouses’ children from the first marriages. We want them to go to our own children.

Would the funds in a regular joint account pass through to each other’s children or only to those designated as beneficiaries to the spouse who outlives the other? Would we need a separate power-of-attorney document drawn by a lawyer, or can we just have the bank or investment institution designate our accounts as power-of-attorney accounts? What’s the difference? Since we hold no joint property, is it even important to draw up a power-of-attorney document? - Reader, via e-mail

Dear Reader: Your situation is not uncommon. You both have financial assets acquired during your other marriages and would like to keep these separate. I don’t see a problem, but you should be talking to an attorney. A durable power of attorney is allowed so that someone, either you or the respective children, could handle the finances of the person who is no longer able to do so. Further, if one of you passes away, the other will have at least a one-third interest in the estate of the decedent. All of this can be circumvented with pre- or post-nuptial agreements spelling out your requirements and wishes.

This is not a case of going to the stationery store and trying to find a form. You each need to get a competent attorney rather than one attorney for both of you.

Personal rep fees may be justifiable

Dear Bruce: I am asking for a second opinion. My grandmother died a year ago. A friend of my grandmother’s was named personal representative. None of us are disputing our inheritances. I am, however, questioning this person’s right to charge the estate $45,000 to act as personal representative. The bottom line is that she only had to pay two bills per month for a period of three years. My grandmother resided in an assisted-living facility, and family members took her to any appointments and did all of her running around. When my grandmother died, the funeral was already planned and paid for by my grandmother, who also made cemetery arrangements. This person literally had to do nothing but cut the checks to the family. I feel this is an excessive amount that she paid herself. – L.S., via e-mail

Dear L.S.: This individual was named personal representative in a will? This person is then responsible to the Surrogate’s Court for any fees charged. Oftentimes, this can be done on a percentage basis, assuming the will did not say to serve without bond or fee. The $45,000 seems like a rather large amount of money. It is not necessarily based upon services provided but rather a percentage of the estate. If the estate is substantial, this may very well be a fee that is legally justifiable. The quickest answer to this is to request it of the Surrogate Court in the county where your grandmother died. They would have to approve this kind of expenditure.

Like it or not, everyone needs a will

Dear Bruce: How important is a will? My husband refuses to make one. He is 53, and he says it is not really necessary. We have four children: 24, 22, 20 and 18. I want to make sure they are all protected. – P.R., via e-mail

Dear P.R.: You’ve got to be kidding. Your husband is acting like a child. A will is absolutely necessary! Forget about protecting your children – it’s you who needs protection. Under the current arrangement, if your husband passes away, in most states, you would only receive one-third of your husband’s estate and the remaining two-thirds would go to your children. Hopefully, they would be wise enough and willing to sign off. But why go through all of this? Both you and your husband should have simple reciprocal wills. A will is a document that says, “Someday, I’m going to die,” and a lot of people have a problem with that.

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