Sunday, March 25, 2012

Executor's commission

Every will must designate an executor. While some people think it is an honor to be named, in reality it involves a lot of work to make sure that the testator's wishes come to fruition and that state law is followed. That being stated, what is an executor entitled to for accomplishing this work?
In many states, the commission of an executor is set by statute and percentages are clearly defined. This is not the case in Pennsylvania. PEF 3537, Section 9.7 states, "The Court shall allow such compensation the personal representative as shall in the circumstances be reasonable and just, and may calculate such compensation on a graduated basis." In determining the reasonableness of a commission, a variety of factors should be examined including the complexity of the matter and most notably the actual time expended.
In the instance in which there is more than one executor, allocation of the overall commission should be undertaken based on the percentage of work performed by one party as compared to the other

Thursday, March 22, 2012

Irrevocable v. Revocable Trusts

The difference between these types of trust is vast and can be used to accomplish your personal estate planning goal.
A Revocable Trust allows a person to amend, change the conditions under which the assets are held, reclaim the assets for personal use or even revoke the trust at any point. These trusts are commonly used to avoid Probate, which is required when an individual dies with assets that pass through their estate. With a revocable trust, once the testator passes, a successor trustee can distribute the trusts assets to the named beneficiaries without the supervision of the probate court. Due to this nature, the process tends to be quicker and more private than probate. These trusts are tax neutral.
An Irrevocable Trust is one where a person relinquishes all the rights to the assets in the Trust. The person cannot amend, alter or revoke the terms of the trust. The trusts assets also are not subject to probate. Further, unlike revocable trusts, these assets are excluded from the Settlor's estate. This helps to reduce the grantor's estate tax burden.

***Mrs. Berdugo is licensed to practice law in PA and NJ. If you have any questions or would like to contact me regarding planning your estate my phone number is 215-992-9662 or my email address is rebecca@berdugolaw.com or you can follow me on twitter @Berdugolaw ***