Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, November 21, 1994 TAG: 9411230065
SECTION: BUSINESS PAGE: EX6 EDITION: METRO
SOURCE: MAG POFF
DATELINE: LENGTH: Medium
My aunt died a few weeks ago, and now my counsin says state law provides for a fee. She plans to charge 5 percent of the estate. Can she do this if the will states to the contrary?
A: She cannot charge a fee if the facts are as you state them.
Charles H. Osterhoudt of the Roanoke law firm of Osterhoudt, Ferguson, Natt, Aheron and Agee, emphasized that he would have to see the document to give an opinion with certainty.
State law (Section 26-30 of the Virginia Code) says in part that "The Commissioner of Accounts, in stating and settling the account of a fiduciary, shall allow the fiduciary any reasonable expenses incurred by him as such; and also, except in cases in which it is otherwise provided, a reasonable compensation....in the form of a commission on receipts...."
An executor is a fiduciary, although the word is broader than just executors.
Osterhoudt said a number of cases have held that a reasonable commission is generally five percent, but it can be greater or lesser depending on the services rendered. That judgment rests with the commissioner of accounts and the judge.
The leading case on the subject, Osterhoudt said, was decided in 1917. That decision said that "When a testator fixes the compensation for an executor or trustee under his will and the executor or trusee named therein accepts the appointment, he is entitled to as much and is limited to as little as the testator has fixed."
The court went on to say that equivocal language in a will that is subject to more than one construction is open to interpretation by a court.
But if the will specifically sets forth that your cousin will serve without a fee, Osterhoudt said, that becomes a condition of her becoming the executrix of the estate.
If a will is silent on the subject, the law provides that the executor or executrix can charge a fee, as your cousin says, according to Osterhoudt. But if she undertakes to qualify under your aunt's will containing that provision, he said, your cousin will be bound by the terms of that document.
He suggested that you review a copy of the will carefully for the specific language and, if necessary, consult a lawyer.
Q:There are a number of stockholders of Krish American Inns residing in this area, and the company is in bankruptcy. When and how do we write off our losses in this stock?
A: Mike Roscoe, spokesman for the Internal Revenue Service in Richmond, said taxpayers who want to claim a loss on a security (which is not based on an actual sale) must make a good faith effort to show that an identifiable event occurred that made the stock worthless. Although he could not comment on a specific case, Roscoe said a bankruptcy is such an event.
Many people prove their claimed losses by obtaining a letter from their stockbroker, he said. The letter should state when and how the stock became worthless.
Roscoe said taxpayers have a period of seven years after the identifiable event in which to claim the loss. The claim could be made for the year of the event or for any year thereafter up to seven years.
Krish American Inns is in Chapter 7 bankruptcy, meaning the company is seeking liquidation. This is the identifiable event, and it happened this year.
A. Carter Magee Jr., a lawyer representing the company in the proceeding, said the company has assets of $7,000 in cash and liabilities of $900,000. It is certain, he said, that there will be no money for shareholders and the stock is therefore worthless.
He said the stock originally sold for $3 a share in 1986. It was selling for 12 cents a share when the company filed for reorganization under Chapter 11 of the bankruptcy code. The company later converted that filing into a liquidation.
by CNB