ESTATE ADMINISTRATION  |  Probating Wills | Representing Executors & Administrators

Elder Law Overview 2019

August 8, 2019

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Estate Administration Services

  1. Advising clients whose spouse has died

  2. Opening Estates and filing required paperwork

  3. Preparation of Pennsylvania Inheritance Tax Return (REV-1500)

  4. Representing Beneficiaries of Estates

  5. Petitions to Remove Executor (in the case of negligent Executors)

 

Experience & Skills

  1. National Bar Institute (NBI) presenter on Estate Litigation

  2. Client-directed levels of service (pay only for services you want)

  3. Compassionate response to difficult family situations

The pain of losing a loved one can be life-changing, and the goal of our firm's estate administration practice is to ease the burden of an executor's legal obligations following a loved one's death. We work with executors and personal representatives residing Crawford County and throughout the country, helping them administer the estates of deceased relatives. We provide a straightforward and efficient approach to estate administration without losing sight of the personal aspect that is so important to our work.



The opening of an estate is required only when a person dies owning assets which are subject to probate in Pennsylvania.  Examples of probate assets include solely owned bank accounts, solely owned automobiles, solely owned real estate, and generally all other solely owned property.  Examples of non-probate property (which are not governed by an Estate, if one is opened), including life insurance, IRAs, annuities, if these items name a beneficiary other than the deceased person or his or her estate.  While non-probate property is not governed by a person's Will or his or her Estate, tax may still be due on such transfers. 



A person's estate can be probate or non-probate.  If there are sufficient probate assets, then an Estate will be opened.  If there are little or no probate assets, our firm can perform services for a family by administering the non-probate assets of a person, such as helping to fill out the necessary paperwork associated with a beneficiary claiming his or her payment from a life insurance policy or annuity.  In many non-probate situations, inheritance tax returns must be paid, and our firm can assist in the preparation of this complex form.



If a probate estate is required, a personal representative will be appointed.  If the Will names and executor, generally that person will be appointed.  If the deceased person does not have a Will, then we will assist in the appointment of an Administrator of the Estate.  In either scenario, this appointment requires the preparation of a Petition that is presented to the Register of Wills of the county in which the deceased resided prior to death.



Upon appointment, the personal representative (executor or administrator), is responsible to advertise the estate in two periodicals of local circulation--this step is critical to ensuring that the statute of limitations for creditors to file claims against the estate begins to run, so that the estate can be closed in a timely fashion.  The personal representative must also notify all beneficiaries of the estate (if a Will, the beneficiaries named in the Will, or if no Will, then the beneficiaries as required under Pennsylvania's intestacy statutes).  The personal representative should also notify the Pennsylvania Department of Public Welfare to determine whether the deceased received medical assistance prior to death.  These relatively simple procedures--all administrative in nature--are critical to ensuring the personal representative is protected from personal liability for failure to properly administer the estate according to law.



Next, a personal representative should proceed to identify all of the deceased person's assets, and protect them.  If the deceased owned bank accounts, letters seeking the date of death balance of those accounts should be sent out, as the information will be necessary to file the Pennsylvania Inheritance Tax Return (REV-1500).  Any real estate should be insured against fire or other loss.  Jewelry or valuable collections should be stored securely.  Solely owned vehicles should be stored and not driven.  All assets must eventually be appraised, for inheritance tax purposes.



Often, the personal representative opens an estate account at a local bank, which holds the deceased person's liquid assets and provides an avenue through which the personal representative may pay the ongoing administrative expenses (lawyers' fees, accountants' fees, appraisal costs, etc.) as the Estate progresses.



A personal representative should also keep careful track of the deceased person's bills, and always consult a lawyer before paying any debts of the deceased person.  Pennsylvania has a very specific hierarchy system for a deceased person's debts, and all debts are not treated equally.  The law creates several classes of debts, which separates administrative expenses from recent medical expenses and funeral expenses and general credit card debt.  These debts may be paid from the Estate, but must be paid in the order the law directs, otherwise the personal representative may be held personally liable for paying the debts of the deceased.  If the Estate has fewer assets than debts, the creditors of lower classes may be paid only a pro rata share of the debt owed.  Lawyers for the Estate also may be helpful in negotiating down debts that the deceased person owed, which often saves the beneficiaries money and increases their inheritance.



After three months from the date of death, the personal representative may make a payment of estimated inheritance tax to the Commonwealth of Pennsylvania, which will result in a 5% discount of the overall tax owed.  A good attorney should ensure that this deadline is not missed, as it provides a simple way to save beneficiaries money.  The final Pennsylvania Inheritance Tax Return is due at 9 months after the date of death, and generally should not be paid sooner than is required.  Creditors have 12 months after the date of estate publication (mentioned above) to submit claims against the Estate.  Medical bills frequently take 6-8 months to be submitted through the deceased person's insurance, so filing at 9 months is key to ensuring accuracy of the filing.  Because the Estate takes a deduction of tax for all valid debts and expenses, this can save money for beneficiaries.



Inheritance tax in Pennsylvania is generally paid from the assets of the Estate, and is calculated based on the relationship of the beneficiary to the deceased: spouses are taxed at 0%, children are taxed at 4.5%, siblings are taxed at 12%, and all other non-lineal persons are taxed at 15%. Because of the potentially high tax costs of an Estate, it is important to hire a lawyer who can help you understand the tax tips and procedures that allow the minimizing of inheritance tax bills.



After 12 months passed the date of death, the personal representative can be assured that the Estate is aware of any possible debts of the deceased.  Usually by 1 year and 3 months after the date of death, the Commonwealth of Pennsylvania will return its approval of the REV-1500 Inheritance Tax Return.  At this point, the personal representative can be confident to pay legitimate creditors and distribute the remainder to beneficiaries.  If necessary, a final accounting will also be filed with the Orphans' Court of the county where the Estate was opened.

Of course, this timeline can be affected in many ways.  For example, if the deceased person owned real estate solely and the Estate chooses to sell the real estate (rather than distribute it in-kind to the beneficiaries), the Estate may stay open until the house is sold.  If there is dispute between beneficiaries and the personal representative, the possible litigation may keep the Estate open as well.  There are horror stories about Estates that remained opened for several years.  Sometimes there is good reason for this, but generally it is the failure of the attorney or the personal representative to timely attend to the Estate issues that need resolution prior to closing the Estate.  Our firm prides itself in performing high quality service in this area without the delays often associated with estate practice.