During the administration of an estate, regardless of whether a loved one died with a will in place or not, the objectives of estate administration remain the same.
The tasks of an Executor can be broken down into four areas of responsibility:
- Gather the assets of the decedent;
- Pay the debts of the decedent;
- Discharge the tax liabilities of the decedent and the estate; and
- Distribute the net remaining estate to the heirs and/or beneficiaries of the decedent.
An estate administration can be formal or information.
A full and complete administration of an estate is known as a “formal” administration. The steps involved in this process are comprised of the following:
- Search for and locate the decedent’s last will and testament;
- File a Petition for Probate and obtain a Grant of Letters;
- Advertise that the estate has been probated;
- Marshall the assets by gathering and securing them in the care of the personal representative (known as an Executor or Administrator)
- Notify the PA Department of Human Services of the decedent’s passing;
- Give notice to the beneficiaries of their possible interest in the estate;
- Pay the debts of the decedent;
- File an Inheritance Tax Return, Inventory, and Appraisement;
- Payment of Taxes;
- File the final account and proposed schedule of distribution;
- Distribute the estate to the decedent’s beneficiaries upon confirmation of the final account;
- File final paperwork with the Court to finalize the estate.
A formal administration of an estate can be quite expensive, so there are also informal alternatives that you should discuss with your legal counsel. Such options include, a small estate petition, a family settlement agreement, or a combination of a formal administration and a family settlement agreement.
Personal Liability for Executors & Administrators
All executors and administrators should remain mindful of the fact that upon undertaking the responsibility of administering an estate, you take on fiduciary duties for the estate. This means, you owe a fiduciary duty to the beneficiaries and creditors of the estate. As such, in the event that you mismanage the estate, or distribute an inheritance to the beneficiaries ahead of paying off the debts of the estate, you could become personally liable to the decedent’s creditors and/or remaining beneficiaries for your failure to administer the estate appropriately.
Questions:
If you have questions about Pennsylvania inheritance tax, feel free to reach out to Covalt Law at your convenience; we’d be happy to provide you with an overview of what to expect as you plan for your estate or administer a loved one’s wishes.
Legal Disclaimer:
This blog positing is made available for educational purposes only as well as to provide Central Pennsylvanians with general information and a general understanding about this area of Pennsylvania law, not to provide specific (or any) legal advice. Use of this blog does not create an Attorney-Client Relationship with the publisher, Covalt Law, or Nittany Settlement Company. This blog is for general informational purposes only. Covalt Law is a law firm in State College, Pennsylvania and some of the information within this blog relates to legal topics. Covalt Law, LLC does not offer or dispense legal advice through this blog or by e-mails directed to or from this site. By utilizing this blog, the reader agrees that the information contained herein does not constitute legal advice or other professional advice and no attorney-client relationship or other relationship is created between the reader and Covalt Law, Nittany Settlement Company, or its attorneys. Moreover, this blog is not a substitute for obtaining legal advice from a qualified attorney licensed in your state or jurisdiction. The information on this blog may be changed without notice and is not guaranteed to be complete, correct, or up-to-date. While the blog is revised on a regular basis, it may not reflect the most current legal developments or law in your jurisdiction. The opinions expressed at or through the blog are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.
Additionally, to ensure compliance with requirements imposed by the U.S. Internal Revenue Service in Circular 230, we inform you that any tax advice contained on this site (including any links provided) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the U.S. Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed in this communication.
