Compensation for Executor in Iowa Probate
In Iowa, the fee for the executor is set by the court and is based upon a state statute. Their fee is also based upon the size of the estate, as reported on the inventory filed with the probate court. Iowa Code section 633.197 provides that the personal representative (executor or administrator) fee shall not exceed $220.00 for the first $5,000 of probate assets, and then 2% on all assets over $5,000.00. All assets of the estate are included in the fee determination, with the exception of life insurance payable to others.
Any compensation received by a personal representative is taxable income to that individual. Thus, if a personal representative is a beneficiary, they may want to consider whether to waive their fee and thus increase their inheritance, which may be free of tax, or to take their compensation and pay income tax on that amount.
Any compensation received by a personal representative is taxable income to that individual. Thus, if a personal representative is a beneficiary, they may want to consider whether to waive their fee and thus increase their inheritance, which may be free of tax, or to take their compensation and pay income tax on that amount.
Comments
etc is that an annual fee and what if there are two trustees? Do the courts allow additional compensation for especially contentious situations.
Expenses of administration have a higher priority then the general creditors, so you might as well pay yourself your fee and the taxes. If there isn't enough funds to pay any other claims, the credit card company is out of luck on payment, but you should make sure the final order addresses that matter.
Gross amount of estate is subject to fee calculation.
By statute, the 2% fee ceiling is the same for executors and attorneys. Often different in actual application.
If attorney/executor asks for more, the court should not grant it. HOWEVER, there can be reasons for extraordinary fees. See http://www.iowaestateplan.com/2007/08/iowa-attorney-fees-in-probate.html
retirement funds, bonds etc. to
husband. He commits suicide one
month after her death. His parents
take all her assets. Is this legal?
($1,500,000) She had parents and
siblings living.
While I wouldn't say this is common, it is is a typical example that I give about how property can pass at death. Named beneficiaries inherit, without conditions or limitations. Thus, if one spouse dies, leaves all to surviving spouse, and the surviving spouse dies 10 minutes (or 10 years) later, the surviving spouse directs where those assets go. They can direct by their will/trust if they have one, otherwise the intestate laws will direct those assets. Short answer - nothing illegal about this.
This is a difficult situation where an executor has personally benefitted from delaying the estate. When it comes time for the final report for the estate, that will be an opportunity for you to object to his handling of the estate and seek some sort of compensation for his actions. You have a chance to present your argument to the judge and let the judge rule. The executor's argument could be that he was "safeguarding" the property. No bright line test and limited information from a blog post, but certainly could get it before a judge and have the judge determine. DON'T sign a consent to the Final Report if you want to have your complaint heard.
The reasons for the challenge are critical in the process and the chance for success.
How is widowers allowance calculated?
Also, what about the house if it is only in the name of the deceased does the house go to the estate if it pays it off. or does the estate have to pay it off and hand it over to the surviving spouse.
Finally, are executors guaranteed payment?
There are special rules for the homestead and surviving spouses. It is possible for the spouse to choose to stay in the homestead for life (life estate) in lieu of the spousal share. It can be a delicate process to allocate the spousal share in some situations. Rather than looking at it on an asset-by-asset basis, look at the big picture to determine the spousal share amount and how to set aside that share.
Final question (you are only allowed three before the meter starts ticking), the executor is high on the list of who gets paid in the estate. I wouldn't say guaranteed, but pretty high on the priority list.
I am seeking guidelines for exactly which estate executor's expenses are appropriate/reasonable to be compensated for in Iowa. Is there such a document? Where should I look?
1. Decedent, before death, put almost all checking/savings accounts as PODs. Annuities and 401K plan all have benifciary designations. Can the attorney still take fees on those accounts eventhough theoretically they would have passed outside of the estate if they had not probated? (I have included them in the inventory.)
2. One of the checking accounts were an "or" account so the grandchild would have access to money in case of an emergency. She has already take the money. Since it is included in the inventory can we take a fee on that amount too? If the answer is yes, can we make her/him pay part of the attorney fee, if necessary, if there is not enough cash available?
Let me know your thoughts.
All of those POD assets (passing outside probate), which are properly included on the inventory, are subject to the fee calculation. Same with the joint account. However, getting the joint tenant to pay could be a challenge if they don't cooperate.
You won't need to go through probate. The credit card company will likely just wipe out the debt, although it is possible they could open the estate and get assets (but not for $6,000). They may try to get you to pay for it. (Don't)
Recently my mother set up a will and was told the executor could not live out of the state of Iowa. Is this true?
There are also some applicable laws about property that is bequeathed but no longer part of the deceased's estate. (Today's word is "ademption").
You should consult with your attorney for specific application of these issues. Unless you need an Iowa attorney...
Yes and no. Yes: all assets (insurance, 401k, IRA, etc.) need to be disclosed as an asset. No: with the exception of life insurance payable to an individual, they can be included in the 2% fee calculation. (Thus, IRA, 401k, etc. are all included, potentially, in the fee calculation.)
I'm a little confused as to who is executor. I'm guessing from your question that the younger brother was actually appointed as executor, but that your husband thought he was or at one time was named. Unless there was any kind of agreement, it may be difficult for your husband to be compensated. He could always file a claim in the estate to seek reimbursement, but it may be difficult to demonstrate how much he should be entitled and the contractual basis for the reimbursement. Worth a shot, but it may be an uphill battle. Some judges may take the position that the services were done as a child for a parent and should not be compensated.
And if so, does that valuation need to be based on the date of the decedent's death?
I am struggling with the idea of why a percentage ownership in a trust, especially since the trust is farm property/rental income should go into an estate valuation, when the whole estate will not be greater than $2,000,000. It appears that will only benefit the lawyer and the executor.
Given the dynamics, it may be better to have an independent executor (like a bank) involved as the executor. While they will charge a fee (as may your sibling) it may keep you and your sibling on equal footing and less likely to be at each other's throats. Banks can also give regular updates/accountings to the beneficiaries, whereas the sibling may not.
If you don't go that direction, then you can just request to keep updated on the status of the estate administration with the attorney.