Perhaps a loved one has died with (or without) a will. Unless you are a lawyer practicing wills and estates administration, you may need legal advice about "estate administration," or, how assets are inherited (among beneficiaries) and debts are paid.
Why is Court Necessary?
A judge is often needed to transfer title to property. That is to say, when a person has died, his property may be owned or titled in that person’s name. The person seeking to distribute or administer an estate may need powers that only a court (the Orphans' court) can convey.
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Understanding Estate Administration
Perhaps a loved one has died with (or without) a will. Unless you are a lawyer practicing wills and estates administration, you may need legal advice about "estate administration," or, how assets are inherited (among beneficiaries) and debts are paid.
Why is Court Necessary?
A judge is often needed to transfer title to property. That is to say, when a person has died, his property may be owned or titled in that person’s name. The person seeking to distribute or administer an estate may need powers that only a court (the Orphans' court) can convey.
Free Consultation.
What Happens Next?
The nature of estate administration breaks down into three main goals and phases:
Collecting the decedent’s property (and making the appropriate reports to the court, taxing authorities and beneficiaries / those who inherit (or statutory heirs);
Paying the decedent’s debts and taxes and any estate or inheritance taxes owed; and
Distributing the net balance of the decedent’s property to the intended beneficiaries (or the statutory heirs).
Whether the decedent had a legal will (testate) or died without a will (intestate), the estate will need to be probated to allow creditors to be paid and for beneficiaries to receive inheritance.
Resolving the affairs of a decedent can be a challenging and complex process. An experienced probate attorney can be a key resource.
Getting It Resolved
You can get great value from a lawyer who is both a "legal-eagle" (sharp on the law and able to make a strong point) but also people friendly: able to work with different people (the judge, beneficiaries, creditors, and others) to get this resolved quickly, fairly and efficiently. A death has happened; you don't have to make enemies because of it. Experienced representation can make all the difference in sorting this out properly.
Free Consultation and Advice
We appreciate the issues you face when faced with the economic issue surrounding the passing of a loved one. You have questions about how to process and estate and inherit money. "How do I create or raise an estate?" The process of estate administration may seem intimidating. You may call any time for a free consultation:
Taking Risks: Proceeding Without Counsel
There are certain forms you can fill out yourself without a lawyer, but you take risks, of course. Our law firm offers a free consultation to help you understand these concepts and get answers to your questions. If you retain us to administer an estate (with or without a will) or to challenge a will that is being administered, our fees are reasonable.
Need More Information?
Let's get an understanding of some of the terminology, to start.
Types of Estates
A “testate estate” is an estate with a will, but an “intestate estate” is an estate in which the person did not have a will. The “residuary” or residue” is what is left over after debts, taxes, and expenses are paid and specific gifts of property are distributed. Hence, a “residuary beneficiary” is one of the persons entitled to the residue.
Will Contest
Most estates do not involve a will contest. A will contest is the procedure by which an individual claims that there was some error or irregularity with regard to a will. See Faust Estate, 364 Pa. 529 - Pa: Supreme Court 1950. The threat of a will contest does not put the entire process in jeopardy. For example, in Pennsylvania, a will may provide that a beneficiary named in the will who challenges said will is barred from inheriting money from the estate at issue. You need to talk to a lawyer before assuming you have to litigate. Do not assume anything about this process or Pennsylvania Probate Code.
Necessary Steps: Appointing a Representative
When estate administration has started, the court appoints a person (or lending institution trustee) as the decedent’s “personal representative.” Next, the personal representative swears an oath as a court officer to execute the laws of the state in settling the decedent’s matters. Where there is a will (i.e., a testate estate) this person is often called the “executor.” Regarding an intestate estate, the person is sometimes called the “administrator.” A personal representative may at times be called a “fiduciary,” which is a person who undertakes duties for and is responsible to others. In Pennsylvania, when the court orders the appointment of the personal representative, then the clerk of court issues to that person “letters of appointment.” This is the personal representative's proof of authority.
Why is a Representative Important?
As mentioned above, only certain people have power to dispose of or transfer property. Hence, a court-appointed personal representative may be needed because of the character (and sometimes the extent) of the decedent's property. Let’s look at a few examples.
Example #1 – a Bank Account
Any old person cannot show up at a bank and claim a right to an account solely in the name of a decedent.A bank willdemand proof of the person’s authority to transfer ownership of the money in the account. An exception to this is where a bank account is in the name of the decedent and one other person “payable on death.” This is often called a “totten trust,” but if that surviving person is you, you should speak to a lawyer about this concept before assuming that any funds are outside of an estate.
Example #2 -- Stocks
If, for example, the decedent owned shares of stock in a publicly traded company (whether it is Apple or Bubblegum, Inc.), the shares need to be liquidated or transferred in kind to the beneficiaries. Only, a transfer agent for those shares (such as a stock broker) will expect good documented authority of a person authorized to act for the decedent, and that comes in the form of a court-certified document (in Pennsylvania called "Letters of Appointment") that shows who has that power.
Example #3 -- Real Property – Land and Buildings
In Pennsylvania,marketable title rules dictate that an interest in land be conveyed by a personal representative if the decedent was the sole owner of an interest in that land. Conversely, if these types of property are held by the decedent, for example, in joint tenancy, it may not be necessary to have a personal representative, because the law dictates to whom the property goes and because there is only a need to present proof of death to do the transfer.
Example #4 - Cars, Boats, Trucks, and other Vehicles
Transferring title to a vehicle in Pennsylvania requires the signature of the seller. Plus, state sales tax may be owed. If less than fair market value is paid for the vehicle, the Commonwealth may ask to see the sales contract and proof of why the full value is not being paid. Transferring title to a vehicle, boat, truck or other item that needs to be titled and registered in PA can be streamlined through the probate process.
Overall Procedure and Objectives
You should not rely on anything on the web about how to administer an estate in PA. The process of Pennsylvania probate depends on the nature of the estate, and may include some or all of the following:
Filing with the Probate Court the most recent will with the court and proving it is legally valid
If no legal will exists, identifying the heirs under Pennsylvania law
Identifying each beneficiary or locating beneficiaries named in a will or trust
Taking an Inventory of the assets of the estate and appraising their value
Resolving debts owed by the deceased person and his or her estate
Receiving money owed to the estate
Distributing items of property, cash, and instruments as directed by the will or other documents
Paying federal and state taxes, as needed
If a business is involved, provide continuity of operation of a business after an owner has died, and managing the business assets owned by the estate
Common Questions:
#1 What Are the Important Deadlines?
Do not rely on any Google search for "Pittsburgh Lawyer" or "Estate Attorney" or "Pittsburgh estate administration" (or even this article) for all the information you need in terms of deadlines. But this will give you any idea of the types of deadlines involved, which are typically accomplished through the cooperation and assistance of the estate’s attorney.
The executor must provide notice by mail and by publication in the newspaper of the administration of the estate. The notice by mail must go to known beneficiaries and creditors. Claims by creditors are cut off one year after the death of the decedent. Within 9 months of appointment, the personal representative is required to make report (frequently called the “probate inventory”) to the court. Allegheny County heir notification is done via a form. Within 9 months of appointment, the personal representative must file Pennsylvania inheritance tax and federal estate tax returns, if required. The estate's income tax year is also an important component in administering an estate.
#2 What Are The Obligations Of the Estate?
Pay Debts. The estate must pay the debts of the decedent.
State and Federal Income Taxes. An estate is a taxpayer, too. The estate will have its own taxpayer identification number. The estate files its own tax return, Form 1041 Fiduciary Income Tax Return. In most instances, the income/revenues of the estate will flow through the estate to the residuary beneficiaries. This may take longer than one year. If that occurs, in the last year, if expenses exceed income, as they often do in a first and final tax year, there may be “excess deductions,” and those flow through to the residuary beneficiaries.
#3 What Are the Costs?
An experienced estate administration attorney can give to you a solid estimate after an initial session to determine what issues may exist in the estate. In Pennsylvania, the court costs and filing fees assessed are minimal. In Pennsylvania, the court costs assessed are minimal, but vary in accord with the value of the estate and also vary by county. The executor is entitled to a reasonable fee based upon the gross value of the estate. While there is no statutory fee, typically the fee is based upon a slight variation of the attorney fee schedule, which can typically be around 4% of an estate dependent upon the estate value. Similarly, the Pennsylvania Probate statute allows the attorney for the estate a reasonable fee on the same schedule as the executor.
#4 What May the Executor Charge?
The PEF Code in Pennsylvania does not set forth a specific compensation for the Executor. There is an unofficial schedule generally considered to represent "reasonable compensation" in ordinary circumstances. The schedule is essentially geared to the size of the probate estate. You may see rates from a high of 5% of an estate valued at $100,000 or less, to, for example, 1/5 % for an estate over $4M.
Nevertheless, the executor is not require to charge and may not want to for tax reasons. Factors to consider are, whether the executor is also a beneficiary and the executor’s tax bracket.
#5 How Much Are Attorney Fees?
The Pennsylvania Probate statute allows the attorney for the estate a reasonable fee on the same schedule as the executor. A rough calculation of the statutory fee is: (gross value of the estate - 5,000) x .02 + 220 = statutory fee. The executor may also have an itemized statement from the attorney for the estate. The fees must be approved by the court. The amount of energy expended by both the executor and the attorney in resolving the affairs of a decedent can be significant require expertise on the part of the lawyer to make things go efficiently. Some other tips: if the executor happens to be a beneficiary, she may not want to take the fee because the fee is taxable income to the executor.
#6 How Long Does All This Take?
The time varies depending on the estate. Many estates can be fully administered in a matter of twelve months. Having an impact on the length of estate administration are:
the type and location of the property;
the challenges in terms of liquidating the decedent's assets, if necessary;
whether there are claims for unpaid debts;
the existence of any challenges to the will; and
the amount of cooperation between the executor and beneficiaries.
Finally, in Pennsylvania, an estate cannot be officially closed by the court until the Department of Revenue issues a statement to the estate certifying that all taxes owed the Commonwealth of Pennsylvania have been paid, which depends upon the filing of the final Inheritance Tax Return and the department's internal review process. Often times, the Department of Revenue can take anywhere between 3 and 6 months to completely review the Inheritance Tax Return.
#7 What Happens When the Decedent Owns Property Out of State?
An estate may need to be opened in any state where the Decedent owned property, especially where the decedent’s property is titled in the Decedent's name only. This is referred to as "multi-jurisdictional probate." You may need to obtain local counsel in the state where you seek an administration. If the out of state property is held in joint name or is titled in the name of a valid trust, multi-jurisdictional probate may not be required.
#8 I Had Power of Attorney Over the Decedent Before He or She Died. Do I have to Raise an Estate?
You should understand the significant difference between an Executor and a Power of Attorney or Agent under a Power of Attorney. A person or agent acting pursuant to a Power of Attorney has power to act when a person (the Decedent in this case) is still alive. Unfortunately, upon the Decedent's death, the Power of Attorney is void and inapplicable, because, quite simply, the principal no longer exists by virtue of death. By way of contrast, an Executor only has power to act after a person dies.
#9 Must I Have an Original Will For Probate or May I Utilize a Copy?
The original will should be probated. It may be possible to probate a photocopy of a last will and testament, doing so can be very tricky. Thus, one should make a sincere effort to locate and submit the original will for probate. That said, if the original is truly lost or unavailable, the Executor must petition the court for permission to use a copy. The court will consider Affidavits from the beneficiaries. There are other formalities that must be followed. The Orphan’s Court scrutinizes these cases, hence it makes sense to take hard look for the original before attempting to probate a copy.
#10 What Range Of Issues Come Up in Litigation?
In addition to probate and trust administration, our law firm handles Orphans' Court litigation. We file suit, meaning, we will petition the court for an accounting of the estate if, for example, you are involved in an estate, trust or will contest. This comes into play when a family member, caregiver, financial advisor, or personal representative/ trustee acts improperly, or is suspected of acting in bad faith. We evaluate issues including:
The exercise of undue influence on the decedent by fraud, deception or coercion
A lack of testamentary capacity
The existence of last-minute additions to wills
A breach of fiduciary duty, and/or
The mismanagement or misappropriation of property
We are available to defend those accused of acting in bad faith or breaching fiduciary duty. These types of actions may go to a jury trial.
#11 Do I Need to Retain Counsel?
Although it is not always necessary to retain an attorney to assist with an estate, it may be advisable to do so to obtain the lawyer’s experience to streamline the process and ensure that it is done correctly. Similar to the way that the process of estate administration has varying names, the same applies for lawyers who do this type of work: estate planning administration lawyer, administration attorney estate planning, lawyer for estate planning and administration, and attorney estate planning and administration. But the concept is the same: these apply to lawyers experienced in estate planning and administration.
For nearly ten years, Pittsburgh estate administration lawyer Adam G. Anderson has provided legal guidance through the probate process, helping families and their loved ones. Mr. Anderson offers experienced advice and counsel for those who have been named executors or estate administrators.
He handles estate planning (will and trust creation) to administration.
We are sensitive to all the issues involved with the death of a father or "dad", mother ("mom"), sister, brother, son, niece, daughter, aunt, uncle, grandfather, grandmother, or other close family member or other loved one. We invite you to contact our Pittsburgh law office to schedule a free initial consultation to learn more about our probate, and estate administration services.
Call us if you are wondering how to administer (or raise) and estate. Don't just ask yourself, "how do I raise an estate?" Call for a free consultation.
