Keeping an Estate Out of Surcharge Actions

Many people feel a sense of pride and honor when nominated to serve as an estate executor. For some, the process of administering the estate brings a sense of closure after a painful loss.


But serving as an estate executor is a job which should not be taken lightly. The personal representative has potential personal legal and financial liability for mistakes during the administration process. Executors have a duty to ensure the estate is administered according to the law and that the estate assets are distributed properly. Proper distribution includes payment of taxes, government claims for medical assistance, creditors and beneficiaries in the right amounts.


Any beneficiary of the Will, creditor of the deceased, or governmental entity with a claim may seek to enforce their right to be paid. These kinds of petitions are known as surcharge actions. A common type of surcharge action called a Petition for Formal Accounting is where the executor is called to account for the handling of the estate before an Orphans Court Judge.



Who Must Receive Notice When an Estate is Opened?

The obvious main purpose of a Last Will and Testament is to leave money and property to one’s heirs. The Will should also nominate a person to serve as the estate’s executor. It is the job of the executor to ensure that all governmental and creditor claims are paid and distribute the net estate to the beneficiaries.


The deceased may have decided to exclude a close family member from the Will. Naturally, this may sometimes create tensions between those given gifts in the Will and those excluded. When the representative opens the estate and receives the Letters Testamentary there is an obligation to notify certain persons that the estate was opened. But this raises a common question. Is the representative required to notify only those named in the Will, or also other family members who were excluded from the Will?


No matter who is named in the Will as beneficiaries, Pennsylvania law requires notice to both the persons named in the Will and other persons as directed by the statute. According to PA Orphans’ Court Rule 10.5, whenever the deceased left a Will, the personal representative must give notice to all beneficiaries listed in the Will, plus the deceased’s surviving spouse and all of the deceased’s children. There are other notice requirements as well which generally pertain to charitable organizations and governmental claims.



Overcoming Tangled Title Inheritance Property Situations

One of the major goals of probate is to pass real estate owned by a deceased person to the heirs. Although real estate is only one type of asset that can pass through probate, the majority of estates contain some kind of real estate.


Estate Properties with Tangled Title


Many of our clients come from the Philadelphia area. Within the city, probate matters tend to be heavily real estate based. Because property values in Philadelphia have risen substantially in the past decade, estate properties are often the largest asset in the estate. But legal problems could surface if the deceased died many years ago and probate was not opened for the deceased.


When a deceased passes with real estate and probate is not opened, the property becomes at risk of an eventual “tangled title” situation. A common tangled title situation is when a property remains in the deceased’s name for many years and the heirs, who should receive the property, also later pass away. The property title becomes “tangled” because an estate must be opened for each person with an interest in the property who later passes away.


Multiple Estates May be Necessary for a Single Property


A tangled title situation can become extreme if a long time passes after the original owner’s death. If a deceased’s estate was not opened for decades, it is possible that estates must be opened for children and grandchildren. The more hands which are in the pot, the greater the likelihood of disputes or complications. For example, estates which have not been opened twenty years after death require special approval through an Orphan’s Court petition. Each person or estate with an interest in the property opens the potential for further roadblocks to selling or retitling the property.