What do you do with a loved one’s assets when they pass on? Are you immediately entitled to use the property because you are related to them? Is there a formal process to go through? Who is entitled to benefit from assets in the estate in such situations? These are the common questions after losing a loved one.
Pennsylvania probate law is unique and may involve many steps, making it challenging to get the answers you need. We will break down the law step by step and address these concerns by walking you through the essentials of the probate process in Pennsylvania.
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What Is Probate in Pennsylvania?
Probate is the formal legal process that can take place after an individual’s death. During the process, the deceased individual is often referred to as the “decedent.” The process involves recognizing the decedent’s last will and testament — if any. Necessary documents and pleadings are filed with the court, and an executor or legal representative is appointed to administer the decedent’s estate and ultimately make distributions to the beneficiaries.
Probate involves a series of processes depending on the assets but fundamentally constitutes securing the authority to collect the assets of the decedent and managing those assets until final distribution. The collective assets belonging to a deceased person make up that person’s “estate.”
The personal representative named in the decedent’s Will is appointed the executor. The executor takes charge of the estate to manage and protect it until it is distributed to the beneficiaries. This process typically involves collecting all assets due to the estate, paying taxes and debts, and distributing the remainder of the estate according to the will or, in the absence of a will, in accordance with Pennsylvania law.
In other words, if the decedent made a will, the will dictates who will get what from the deceased person’s estate. However, if the decedent did not have a valid will, the Pennsylvania intestacy laws will guide the distribution — to die “intestate” means to die without a will.
There are certain essential principles to note about Pennsylvania estate law:
What is the Responsibility of a Personal Representative?
The personal representative performs a vital role in the probate process, including the following:
1. Consider Hiring a Lawyer
The probate process in Pennsylvania is unique. An overall understanding is necessary, but you may need the assistance of an attorney to answer specific relevant questions. For example, the potential personal representative must determine the circumstances in which a probate is required, and a lawyer can make that simple.
Personal representatives are held to the highest standards and owe a fiduciary duty of care and trust to the estate beneficiaries. To have a fiduciary duty means you have a legal duty to act in the estate’s and beneficiaries’ best interests. Disregarding this legal requirement, intentionally or unintentionally, may saddle you with liability.
Hiring an estate attorney takes the load off your shoulders. Lawyers assist with the documentation and ensure that the estate is administered in accordance with the law. They mitigate your risk of facing liabilities.
2. Determine if Any Assets Don’t Need to Go Through Probate
The personal representative’s responsibility is to ascertain whether the assets must go through the probate process. Securing an attorney can help avoid errors. The executor or administrator must gather and inventory all assets subject to probate and produce the list to the Register of Wills in the county where the decedent resided at death.
Generally, only the assets the decedent held alone in his or her name go through probate. These assets are called “probate assets” and could be real estate or financial holdings or countless other things. Any property jointly owned with right of survivorship or listing a beneficiary could avoid probate and pass directly to the intended recipient.
For example, when the decedent names a beneficiary of a life insurance policy, the death benefit passes automatically to the named beneficiary upon death. While the beneficiary may need to take action to reach out to the insurance company carrying that policy, no probate should be needed. The insurance contract likely activates a direct payment to the beneficiaries without going through the estate.
Common non-probate assets can include:
3. Gather Necessary Documents
The probate process involves a lot of paperwork and documentation for different purposes. The executor must identify the relevant documents, keep them secure, and produce them whenever necessary.
Upon death, the executor collects all property of the decedent’s estate. This responsibility also requires the executor to secure the documents associated with those assets. Such documents may include titles to real estate, bank statements, financial details and documents relating to personal property like vehicles or valuable collections.
One of the first things you must do as an executor is notify the beneficiaries and creditors of the opening of the probate matter with the court. Formal notice must be provided to the beneficiaries. In the case of creditors, executors must publish legal notices in a local newspaper and local legal journal to notify creditors that the probate has begun.
To open the probate, Pennsylvania laws require the executor — now called the petitioner — to file a petition for the grant of letters. Relevant documents, including the following, will support the petition:
4. File the Will and Petition for Probate
The executor is responsible for starting the probate process to acquire the letters testamentary (“letters”) by filing the petition for probate — in the case of an intestate death, you apply for letters of administration. These court-issued documents enable you to administer the estate.
The petition for the grant of letters is made under oath and must contain vital information, as quired in the petition:
The petitioner may be requested to provide additional information or facts necessary for the grant of letters.
The executor is responsible for filing the will as an attachment to the petition for probate when the estate is opened which allows the court to authenticate the will. The witnesses to the will must authenticate their signatures and that of the testator under oath at the court. However, you can avoid this step in the probate process if the will was executed in the presence of a notary public. Such wills are called self-proving wills.
The Register will examine your petition and issue the letters testamentary when satisfied. The Register will also issue a Short Certificate, which verifies the appointment of the executor. The executor is usually required to present the short certificate to the banks, insurance companies, transfer agents and governmental institutions when administering the estate.
What Happens to Small Estates?
For small estates below $50,000 and not containing real estate, the executor may file a written petition with the court within the county where the decedent was domiciled at the time of death to settle the estate. The court may grant this request and direct the distribution of the property. The decree of distribution is sufficient authority to all registrars, transfer agents and persons dealing with the property to receive the property without further administration.
What Are the Probate Deadlines in PA?
Here are six critical probate deadlines and timelines:
What Happens When You Miss Probate Deadlines?
The consequences of missing a deadline may depend on the circumstances of each case. For example, without initiating a probate, the would-be executor lacks the authority to transfer assets to to any beneficiaries or heirs who are entitled to receive them. If you fail to initiate probate within 21 years of the decedent’s death, you may lose your opportunity.
A person who fails to challenge the validity of a will within the specified time may lose the opportunity to do so. Even if permission is granted, they may be unable to recover specific properties belonging to the estate, especially those transferred to a bona fide purchaser acting in good faith. The same fate may apply to creditors who fail to claim debts within the required time frame.
Failing to file inheritance tax returns within nine months after the decedent’s death may result in penalties, interest, and fees.
Generally, the consequences of missing probate deadlines can include:
How Do You Close an Estate in PA?
Estates in Pennsylvania close in one of two ways — formally or informally.
Informal closure is the more common and easier of the two because it eliminates any judicial proceedings. Informal closure may happen through a release agreement, also called “a family settlement agreement.” The release agreement allows the beneficiaries to approve and consent to the administration and final distribution of the assets. In other words, it “releases” the personal representative from liability for administering the estate.
Formal closures require the personal representative to file an account of the administration of the estate with the Orphans’ Court in the county of probate. This accounting contains the details of the assets received and all expenses paid and is accompanied by a request for distribution.
The judge may approve the petition and allow the personal representative to distribute the assets and pay all outstanding expenses. However, when an interested party files an objection, the court will set a date for a hearing.
What Happens After an Estate Is Closed?
After distributing the proceeds, the executor files a final status report with the Register of Wills within the county of probate. The report must state that the executor has successfully concluded the estate administration.
What Happens When a Person Dies Without a Will in Pennsylvania?
Under the intestate succession laws, the spouse and blood relatives inherit the estate. Generally, the order of inheritance is as follows:
Need Help With the Estate Administration Process?
The estate administration process enables a personal representative to manage a deceased individual’s estate and distribute assets according to a will or the laws of intestacy, as the case may be. The personal representative must act diligently and in good faith. He or she must determine whether it is necessary to go through the estate administration process, gather the required documents and file the required pleadings with the Register of Wills. Due to the technicalities involved, most personal representatives partner with estate attorneys for assistance.
Johnson Duffie is an award-winning law firm with decades of experience in estate planning and administration in Pennsylvania. Our team of knowledgeable attorneys offers independent attention to ensure that your concerns are addressed, regardless of the level of complexity. Do you need help through the estate administration process? Contact us today.