inheritance question and again, family...

[Anonymous]

My uncle passed away and my cousin was appointed to transfer the financial assets to my other uncles and my mother. My cousin, however, kept a small amount for herself and didn't inform anyone when she transferred the funds. I only noticed after doing the math as I have the inheritance documents. I asked her and she justified with expenditures that came in later and she wants to be reimbursed for her time. What would you do, to let her very clearly know that this is not very ethical, doing without asking and not telling.

[Anonymous]

If it is a small amount I would let it go. Not worth making a fuss over and there are a lot of expenses that come with dealing with this stuff.

[Anonymous]

The will/trust may have stipulated compensation for the executor.

[Anonymous]

Reasonable compensation for an executor is not unethical. And a reserve for late field expenses may also be permitted. It's bad that she was secretive but given your reaction, I don't blame her.

[Anonymous]

I think typical and ethical. Being an executor is a lot of work and can be a pain. Maybe less ethical to not tell anyone, but also probably no one asked except you and you got the honest answer.

[Anonymous]

Was your cousin appointed as the Executor? Most states have provisions that allow an Executor of an estate to take compensation. Some wills specify the amount.

[Anonymous]

In many states the Executor is entitled to a fee of as much as 10% of the estate. Of course many don't take it but what is legal is all that matters. Op, you need to use legal terms. Legal is legal.

[Anonymous]

It’s not unethical

[Anonymous]

Completely reasonable. But she should done it in the up and up and provided date of death balance, growth/loss, expenses, and distribution amounts.

I’ve been an executor and a trustee (still). I document everything and have an open book policy.

[Anonymous]

The will may stipulate compensation, but even if it didn't, the executor is entitled to reimbursement for their time. That amount can be agreed upon by the beneficiaries or established by the probate court. Some states have established guidelines for what is a reasonable amount of compensation for an executor/trustee. For example, Maryland says that compensation should not exceed 9% of the first $20,000 of the estate and $1,800 plus 3.6% of the excess over $20,000. So if an estate is worth $100k, reasonable compensation in Maryland would be up to $6,480; for an estate of $1M, reasonable compensation would be up to about $39k. NY has different guidelines but the results are similar--by my math, $5k for an estate worth $100k and $34k for an estate worth $1M. So I would look at what your cousin has retained and see if it would meet the definition of "reasonable" in the applicable state (or other states if the applicable state has no set guidelines). If it's reasonable, no court is going to deny it. If it's not reasonable, you'll have to get the court involved.

So charging for her time is completely ethical. But it needs to be "reasonable," and she should have declared in writing her intention to claim compensation and the amount. Just doing it on the sly is not acceptable.

[Anonymous]

Please, I hope your cousin isn't the child of your uncle who passed away?

[Anonymous]

Anonymous wrote:Reasonable compensation for an executor is not unethical. And a reserve for late field expenses may also be permitted. It's bad that she was secretive but given your reaction, I don't blame her.

She deserves to be paid for her time. She probably should have made that that clear to everyone though.

I think it’s strange she was executor and was expected to work
For free.

[Anonymous]

I would let it go but cut her off immediately after the estate is settled

[Anonymous]

Really depends on the amount

[Anonymous]

You have no idea how hard it is to be the executor, apparently. It’s legal and ethical for an executor to be paid for their work, specifics depend on your state.