annuities part of executor fees
Have client who’s Aunt’s had 900k in annuities and the executor took 46k (900k times 5%)for executor fees.
As far as I am aware of, annuities cannot be part of an executor’s fee due to they have beneficiaries and bypass probate…am I correct?
Thank you,
Douglas
Permalink Submitted by Alan - IRA critic on Thu, 2013-02-21 18:55
Are you sure the estate was not the annuity beneficiary? Even if that was the case, this sounds like a higher % than any state formula would produce for an estate of 1mm.
Permalink Submitted by Douglas Bauerband on Mon, 2013-04-22 17:17
the estate was not the beneficiary, her Nieces were. Therefore, the annuities (due to beneficiares listed) should not be included in the executor fees, correct?
Permalink Submitted by Alan - IRA critic on Mon, 2013-04-22 18:20
Correct.
Permalink Submitted by Herm Brames on Tue, 2013-04-23 01:56
Does the exclusion from executor fees apply to TIRA’s and ROTH’s where the deceased had designated benificiaries?
Permalink Submitted by Alan - IRA critic on Tue, 2013-04-23 02:46
Yes, when there is a designated beneficiary, IRAs are not subject to probate and therefore not subject to executor fees.
Permalink Submitted by Douglas Bauerband on Thu, 2013-04-25 18:50
my mistake…the annuity beneficiary was the estate. So the executor can charge a commission on the total of the annuity or just the income from the annuity…its was annuitized and the payment goes to the estate as beneficiary over 5yrs.thank you.
Permalink Submitted by Alan - IRA critic on Thu, 2013-04-25 19:31
After the annuity was annuitized, there is no longer an account balance. The executor fee would probably be based on some present value computation based on the annual payment and the remaining number of years that payments could be made. That would be a somewhat lower value than 5 times the annual payout. Of course, in many states there are detailed statutes that determine how the executor fees are calculated.