In the Commonwealth of Pennsylvania, when an individual passes away, any and all possessions owned by the decedent will go into their estate. In the simplest of terms the purpose of estate administration is to pay off debts to all creditors the decedent owed money to during their lifetime, pay all taxes owed, and distribute the remaining money in the estate to the beneficiaries. In order to determine who the beneficiaries are, it must first be determined whether or not a valid will was in place at the time of the decedent’s death. If a valid will was in place, the assets in the estate will be distributed in accordance with the will. If no will is in place at the time of the decedent’s death, the assets will be distributed in accordance with the intestacy laws of Pennsylvania.
Once it is determined how the assets in the estate are to be distributed, the next step must then be to probate the estate and appoint a personal representative to administer the estate process. The probate process is handled through the register of wills office in the county in which the decedent lived. The register of wills office will provide letters of administration that allows the personal representative of the estate to act on its behalf. An advertisement is then made in order to let any and all creditors know that the individual has passed and an estate has been opened. Short certificates will also be provided by the register of wills office to allow the personal representative to gather any and all assets that are in bank accounts, stocks, life insurance policies etc., in order to obtain date of death values on the assets and transfer them into the estate account. The estate account is opened by the personal representative using a Tax ID number and all assets must be transferred into that account.
The role of the personal representative is essentially to ensure that the assets in the estate are handled properly whether it be by will (testate) or by law (intestate). If an a personal representative does not administer the estate properly (does not follow the mandates of the will, takes money from the estate account without authority, co-mingles funds, does not pay creditors etc.) he or she may be held personally liable.
In Pennsylvania, inheritance taxes are due within a 9 month period from the date of the decedent’s passing and a 5% discount is possible if prepayment is made within 90 days of the decedent’s death. The amount of inheritance taxes owed is determined by the relationship between the beneficiaries and the individual who passed. The breakdown on inheritance taxes are as follows:
Spouses of decedent- no inheritance tax owed
Children of decedent- 4.5%
Siblings of decedent- 12%
Friends/Cousins/Niece/Nephews of decedent- 15%
Estates can be concluded either through a formal accounting in which the court will make a determination on the distribution and administration of the estate. The second, and more expedited way, is to have all beneficiaries sign a release that states they are in agreement with distribution and administration of the estate assets. Generally, the former process is usually done when there is a dispute regarding the administration and/or distribution of the estate.
At The Town Law, we understand just how difficult estate matters can be. With our vast experience handling estate cases throughout Bucks County, Delaware County, Chester County, Montgomery County, and Philadelphia County in Pennsylvania, we are well-equipped to ensure you get the best result possible with attentive attorneys by your side throughout the process. Contact our firm today for a free consultation. Our staff of experienced estate attorneys is dedicated to the best outcomes for all of our clients.