The personal representative of a deceased person’s estate is known as an executor or administrator. A representative is nominated by the terms of the will or may be selected among the heirs if there was no will. The representative has the responsibility to move the estate through probate court and comply with the legal and financial duties. In the ordinary situation, the basic job is to collect the assets, complete the legal and tax filings, and distribute the proceeds to the beneficiaries. But although this seems simple, these tasks can be highly complex.
What are the First Steps?
A person is not legally entitled to administer an estate unless first receiving authorization from the Register of Wills, regardless of whether there is a will. The process begins with the filing of a petition with the Register of Wills seeking issuance of “Letters Testamentary” or “Letters of Administration.” The petition must be filed in the county where the deceased person lived. Receiving “letters” gives the representative the power to handle the legal and financial affairs for the estate.
What Happens to the Estate’s Assets?
The representative has the duty to safeguard all estate assets and preserve the inheritance for the intended beneficiaries. An investigation must be made to inventory all probate assets. A bank account should be opened with an IRS tax identification number and all liquid assets must be deposited into the new account. Personal property must also be itemized and any real estate must be properly maintained.
All probate assets will be listed on a formal form with the Register of Wills called an “Inventory”.
What About Debts and Taxes?
Estate assets are often used to pay for any outstanding debts or estate administration expenses. Any debts owed by the deceased upon death must be satisfied. Creditors have one year after publication of a notice to come forward and make a claim for outstanding debts.
Pennsylvania imposes an inheritance tax and requires the filing of an inheritance tax return. This return is due within nine months of the date of death. The tax is imposed on the value of the entire estate. The tax rate ranges from 4.5% to 15% depending on the relationship of the deceased to the person receiving the inheritance.
When is Administration Complete?
An estate may be closed either by all beneficiaries signing a Settlement Agreement or by filing a formal accounting with the Court. A formal accounting is a lengthy and expensive process and is typically used only when there is a dispute between the beneficiaries.
As a probate attorney to estate executors, I help settle estates efficiently and reduce stress. If you know someone faced with a probate process or roadblocks to a property sale, please have them contact us for a free evaluation at:
Phone: (215) 918-4242
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