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Joint bank accounts and inheritance

On Lawyer & Legal » Wills & Trusts

5,401 words with 6 Comments; publish: Wed, 07 Aug 2002 16:34:00 GMT; (800125.00, « »)

The state is: NY. My father recently died. I am the sole heir of his estate. He and I were joint on all bank accounts. I had no problems getting his name removed from the accounts because they were joint accounts. I went to a lawyer about getting the real estate properties in my name (which we were not joint on) and the lawyer informed me that the bank accounts, even though I am joint on the accounts, have to be considered part of my father's estate and are subject to the inheritance tax if it exceeds $1 million. Also, for payment the lawyer gets 5% of the entire estate which includes these joint accounts. Is this right? I feel like my lawyer is ripping me off.

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    • This is a difficult question to answer. I assume you did not sign any type of written agreement or contract with him.

      Just ask him how many hours he has spent on this case and ask him to submit an itemized bill for the work he has already done. If it is reasonable, within $200 - $600, then pay it. If it is highly exorbitant then pay only half or a third of what he is asking and leave the balance unpaid.

      #1; Fri, 09 Aug 2002 10:56:00 GMT
    • Thank you Dandy Don! I did consult another lawyer and was told the same thing that you told me. I have one more question. I have not given this lawyer a retainer. He was just going to collect his 5% from the estate. However he has done some work such as having my father's house appraised, etc. How do I get rid of this lawyer now that he has done some work for me? I want to pay him for his work (but not be ripped off) and find another lawyer. Any advice you can give will be greatly appreciated.
      #2; Thu, 08 Aug 2002 22:10:00 GMT
    • dawnao,

      If you need an attorney, hire him by the hour and keep close check on him. Do as much of the leg work yourself and you will save a ton of money. If you just turn this over to an attorney and say "handle it", you will most likely get hosed (like the first attorney). This isn't that difficult compared to the fees they will try to charge.

      #3; Sun, 11 Aug 2002 20:52:00 GMT
    • I don't know how I will ever be able to thank you for your advice. You are a godsend! If you know of any good lawyers in the Yonkers, NY area just let me know. Thanks again for everything!
      #4; Fri, 09 Aug 2002 13:25:00 GMT
    • Glad you have a new lawyer, as it seems the former one was ripping you off. 5% of the gross estate -- especially a million dollar estate -- is exhorbitant.

      Absent major complications (a will contest, competing claimants, lost relatives, people in need of special guardians, and more) which do not seem present, it is relatively simple for a lawyer to handle an estate.

      There are 3 parts to the lawyer's work.

      1. Filing the Will in court and getting it admitted to probate, or if there was no Will, having you appointed as executor and determining who the heirs at law to the probate estate are. (The joint bank accounts and other property in joint name or with beneficiary designations passes by operation of law.)

      2. Helping you gather the probate assets and, when appropriate, distributing them, and doing the filings, and possiblly a formal accounting if needed, with the probate court.

      3. Dealing with federal estate tax issues, if the estate was $1 million or more (or if there had been earlier gifts over $1 , per person in any year) and any state estate tax. All the jointly held property (although NOT part of the probate estate) IS PART of the estate for Federal and most state estate tax purposes. So if X has a $1 , probate estate consisting of stock and mutual funds, and another $1.9 million in a jointly held home and jointly held accounts and on life insurance and annuities with beneficiary designations, as the total estate for estate tax purposes is $2 million, there would be significant estate tax work to be done. In that case basing the fee on just the probate estate would not be sensible as the bulk of the work would be on the estate tax aspects.

      Most states have a process to have the county bar associations mediate or arbitrate fee disputes. In this case, the lawyer seems so overreaching that it may make sense to report him or her to the Grievance Committee of the Appellate Division of the Supreme Court for the Second Department (if the lawyer is based in Westchester County) which is based in Brooklyn and covers Westchester County.

      #5; Wed, 14 Aug 2002 13:47:00 GMT
    • If it's not too late, fire this attorney and get another one. He is not being honest with you. The bank accounts are not considered part of the estate because the ownership automatically became YOURS at the death of the other co-owner. Anyone who knows the law should know that this is the case.

      Of course he is trying to jack up the estate value so he can try to get a larger fee. If he questions you about anything, tell him you will need to get a second opinion from another attorney.

      You should have done more than getting his name removed from the accounts--you should have the bank issue you the checks NOW in your name so the attorney nor anyone else can get their hands on this money and so that it will not be put into an estate account.

      Oh, and by the way, the executor fees for New York are on a sliding scale: 5% of the first $100,000 estate value, plus 4% of the next $200,000 estate value, etc. which is a little bit different than a flat 5% fee of everything.

      If you have already paid a retainer to hire him, then I guess you are stuck with him, if you can deal with it.

      DANDY DON (tiekh.willstrusts.todaysummary.com.yahoo.com)

      #6; Wed, 07 Aug 2002 18:58:00 GMT