Thursday, August 21, 2014
Inquirer Daily News

Executor wrestles with uncle's estate

DEAR HARRY: I'm faced with a problem regarding my uncle's estate. I'm the executor of the estate, which is now 95 percent in stocks and bonds. The total estate is a little less than $600,000, not including cash of $28,000. The widow is the principal heir, with her two sons as contingent beneficiaries. We are in the process of moving all the assets to a trust, as provided in the will. As the sole trustee, I have full and unlimited power to make distributions to the wife. But how much? The widow is getting Social Security of $1,900 monthly and nothing else. She is 72 and in exceptionally good health. What do I do about distributions without her outliving her resources? She has monthly expenses (without luxury expenses) of about $5,500. Help!

WHAT HARRY SAYS: At her age, her life expectancy is about 15 years, maybe longer because of her health. Let's get some figures to consider. With no income or losses, she would have $3,333 per month during the 15-year period. If the trust earns 2 percent, that figure goes to $3,861. For 4 percent, 6 percent and 8 percent, it goes respectively to: $4,438, $5,069 and $5,734. Losses would pull down that $3,333. My vote is for $4,000. The trust should earn that easily, and it will cover her expenses. Let us hope that you don't run out of money before she runs out of time.

 


Email Harry Gross at harrygrossDN@gmail.com, or

write to him at Daily News, 801 Market St., Philadelphia, PA 19107.

 

Harry urges all his readers to give blood. Contact the American Red Cross at 800-Red Cross.

Harry Gross Daily News Personal Finance Columnist
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