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Fiduciary Fees Ohio



Executor or administrator fees are established by the state legislature and are based on a percentage of the estate. The percentages are from 1% to 4%, depending upon the nature and value of the assets.




Fiduciary Fees Ohio


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An executor or administrator is entitled to a statutory fee, even though the fee is often waived. The statutory fee in Ohio is 4% of the first $100,000, 3% of the next $300,000, and 2% of probate assets over $400,000. Also, there is a statutory fee of 1% for real estate not sold, and a statutory fee of 1% for some assets not passing through probate. In cases where extraordinary services are required, the executor may apply for additional fees. A spouse who is an executor usually waives the executor fee, and a child often takes less than the statutory fee or no fee at all. Even if the fee is accepted, most heirs do not object to these fees, because the executor is often an heir. However, many who have been an executor of an estate will tell you that even the statutory executor's fee is not enough to compensate for the responsibility and expectations placed on the executor's shoulders. If all the heirs are also the executors, it is generally advantageous to waive the fee because executor fees are subject to income tax while assets passing to heirs are not.


An attorney needs to be involved in estate settlement to ensure that property is transferred properly, titles are valid, tax forms are properly submitted, etc. The Ohio Supreme Court has indicated that attorney fees have to be reasonable, and that probate court in many (but not all) Ohio counties must set a percentage fee schedule of reasonable attorney charges for settling an estate. This fee schedule is different from county to county. Typically, the attorney can apply for additional fees for extraordinary services. For example, in some counties, preparing a federal estate tax return is considered an extraordinary service. You should discuss fees with your attorney before asking him or her to settle your estate.


Some attorneys charge not by a percentage, but by the hour. The hourly rate might seem exorbitant, but these fees also cover the attorney's overhead expenses such as secretarial and legal aid expenses, office rent, computers, etc. Also, attorney fees assessed by the hour in most cases turn out to be less than those calculated as a percentage of the estate, especially for larger estates. In general, with an attorney that charges by the hour, the fees will be lower if you do more and the attorney does less. The time you spend in understanding estate planning, estimating the size of your estate, and prioritizing your goals might reduce the hours spent by your attorney. However, most attorneys in more rural counties charge by a percent of the estate. Attorney charges can be estimated by figuring 1.5% of the estate for larger estates, 3% of the estate for smaller estates, but no less than $1,000 no matter how small the estate. Do not hesitate to shop around for an attorney with whom you feel comfortable, trust, and want to handle your estate. Ask friends, interview attorneys, check the Ohio State Bar Association certified specialist lists, or scout out other attorney rating services to find the right attorney for you.


If a living trust is funded to avoid probate, attorneys 1) create the trust; 2) transfer property titles and deeds into and eventually back out of the trust; 3) file estate tax forms; and 4) dissolve the trust. Fees for all these functions should be established prior to entering into such an arrangement. This is the case with living trusts, as it could be quite some time between trust creation and dissolution. Also with trusts, it might be to a family's advantage to work with the same attorney or firm through the whole process. Attorney fees could be higher than necessary if different firms perform the above functions.


Appraisal fees are paid to an appraiser who is recognized by probate court. The fees usually range from $100 to $5,000, but can sometimes cost even more. The amount charged for appraisal depends on the amount of property to be appraised, the difficulty of the appraisal, and who does the appraisal. An appraisal is necessary to establish the value assigned to assets for tax purposes, to calculate fees based on the value of the estate, and to equitably distribute the appropriate portion of the estate to each heir. An appraisal might be necessary even if no property passes through probate, as the value of both probate and nonprobate property is needed to fill out estate tax forms.


The term probate costs is often misused to indicate the sum total of estate settlement costs. Used properly, the term refers to the fees and costs charged by probate court. Probate court costs range from $200 to $500. When the term probate costs is used in place of the term estate settlement costs, some assume that by avoiding probate most of the costs of settling an estate will be avoided. This is simply not true.


An additional disadvantage to splitting estates between spouses is that estate planning becomes more complicated. Splitting estates and trust creation requires increased planning and increased attorney time and fees during your lifetime. However, with proper planning, attorney fees at death can be reduced. These fees are not reflected in the cost savings depicted. For some, particularly smaller estates, the increased time and trouble might not be worth the cost savings.


In smaller estates, the attorney fees, Ohio estate taxes, and costs of dying are the major components of settlement costs. Probate court fees and appraisal fees are relatively small, even in smaller estates.


As indicated before, the executor is often an heir who frequently reduces or does not accept executor fees. However, attorney fees and Ohio estate taxes might be of concern, as they make up the majority of the estate settlement costs for estates less than $2,000,000. If concerned about attorney fees, do the following:


Inheritance claim litigation often involve claims to invalidate documents or transactions through declaratory judgment claims as well as the pursuit of breach of fiduciary duty claims. Ohio follows the American rule which generally provides that in litigation each party bears his or her own attorney fees. However, in certain circumstances, or in any dispute involving a trust, Ohio has enacted statutes that authorize a court to allocate attorney fees based on equity.


Under Ohio law, an executor is allowed to resign, although doing so requires an order issued by the court. There are also grounds for the removal of the executor. Grounds include failing to file inventories and accounting in a timely manner, or if they are habitually drunk, incompetent, commit fraud, neglect their duties as executor, or violate their fiduciary responsibilities in any manner.


Until the estate is disposed of, the executor is charged with protecting its assets. This includes keeping personal property of the decedent intact by prohibiting family members from taking items from the residence. If there is real property or vehicles involved, the executor must keep them maintained and secured and ensure insurance and taxes are timely paid. If the estate includes investments, the executor should protect them but is not required to alter investment strategies to garner higher yields for the estate. The executor does, however, bear a fiduciary obligation to move suspicious investments to preserve their value.


Executors are prohibited from profiting personally from the estate they administer. That said, Ohio law does allow them to be paid fees based on the value of the estate. They may collect a percentage of all personal property, income, and real estate they sell ranging from 2% to 4%, depending on the value. They are also allowed to collect 1% of all property not sold but distributed. They can charge no other fees for their services.


C. Attorney fees may be allowed if there is a written application, as set forth in Appendix A-1, which sets forth the amount requested and will be awarded only after hearing, except as modified herein.


B. If the requested fee is not within the guideline fee set forth below in (G), said application for attorney fees shall be set for hearing before the Court. Notice to the beneficiaries affected by payment of fees shall be in the form set forth in Appendix A-2. Any party affected by payment of attorney fees may file a Waiver of Notice of Hearing on Application for Attorney Fees and Consent to Payment of Attorney Fees in the form set forth in Appendix A-3


F. Where the attorney, law partner or firm associate is appointed as fiduciary, the total administration fee for ordinary administration may not exceed the statutory fiduciary commission plus one-half of the attorney fees. In such cases, a formal hearing will be required regardless of the fee requested unless all affected beneficiaries of the estate have given their written consent, as set forth in Appendix A-4.


e. Attorney fees for services rendered in a relief from administration shall be listed on the back of the Schedule of Assets to be Relieved (form 5.1) as a debt. For fees under $1,000.00, no application is required.


Imagine the following scenario: Your sister, your only sibling, is a single mother of two young children. She hasn't gotten around to making an estate plan because, well, she's the single mother of two young children. You know she does all her banking online, but you don't know the details. If she died suddenly, and you needed to administer her estate, would you know where to begin? Would you even be able to gain access to the information you needed? This is just one of many scenarios that makes fiduciary access to digital assets in Ohio an important issue.


A fiduciary is someone who manages assets for the benefit of someone else, and is required to do so in the beneficiaries' best interest. So "fiduciary" is an umbrella term that refers to, among other things, the executor of a will, the administrator of an estate where there is no will, a guardian, an agent under a power of attorney, or the trustee of a trust. 041b061a72


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