Probate & Estate Administration
for Federal and Pennsylvania
Probate??? What is that??
The formal probate proceedings begins when the executor named in the will files the will with the Register of Wills in the county in which the deceased person lived. Courts in many counties make all the required forms available online, where you can fill them in and print them.
Keep in mind that when you submit a will to the court for probate, you will have to pay a fee of up to several hundred dollars....the greater the value of the estate, the larger the fee.
Even if the estate is below the threshold for filing with the IRS ($5.43M in 2015), you will still need to file the will through probate in Pennsylvania. The local court may be of help; however, they cannot provide any legal advice. Court forms can be downloaded from the county website. The process can take a while, and you may need to make regular reports to the court. If the estate is large, always consider hiring an attorney. Fortunately, many assets can be transferred to the people who inherit them without probate.
Assets That Can Skip Probate
Generally, only assets that the deceased person owned in his or her name alone go through probate. Everything else can probably be transferred to its new owner without probate court approval.
The most common kinds of non-probate property are:
Property the deceased person owned in joint tenancy with another person—for example, a house or bank account owned by the deceased person and his/her spouse
Assets for which the person designated a beneficiary—for example, a payable-on-death (POD) bank account, a retirement plan account, or life insurance policy
Assets the deceased person held in a living trust.
Simplified Probate for Small Estates
Pennsylvania offers a simplified probate process for small estates, which state law defines as estates that contain no more than $50,000 in assets. That total does not include real estate, certain amounts the family can collect without probate, and amounts used to pay funeral expenses. (20 Pa. Cons. Stat. Ann. § 3102.)
To begin the small estate process, the executor of the estate files a written request with the local probate court, asking to use the simplified procedure. The court may permit the executor to distribute the deceased person’s assets without going through all the parts of regular probate.
Regular Pennsylvania Probate
If the estate is too large to qualify for simplified probate, you’ll need to conduct a formal probate proceeding. This begins when the executor named in the will files the will with the Register of Wills in the county in which the deceased person lived. If there is no will, the surviving spouse or an adult child usually steps forward to serve as the administrator of the estate. (The term “personal representative” is often used to mean either executor or administrator.)
The executor also files a document called a petition for probate, asking the local probate court (“orphans’ court”) to open a probate case. Courts in many counties make all the required forms available online, where you can fill them in and then print them. There is a filing fee that may be several hundred dollars; the greater the value of the estate, the larger the fee.
The court issues “Letters Testamentary” to the executor or, if there is no will, “Letters of Administration” to the administrator. This document gives the executor authority to gather the estate assets and begin acting on behalf of the estate.
Many Pennsylvania wills are “self-proving”–that is, they are accompanied by sworn, notarized statements signed by the witnesses who watched the deceased person sign the will. If the will isn’t self-proving, then to prove that the will is valid, the executor will have to get sworn statements from the witnesses and file them with the court.
The executor must then give notice to heirs, beneficiaries, creditors, and the public that the probate is beginning. This is accomplished by publishing a legal notice in two local newspapers.
The executor gathers and inventories estate assets, and pays the debts and taxes. The executor may also need to sell estate property during the probate process. Most transactions don’t need prior approval from the court, though the executor must periodically file status reports with the court.
Pennsylvania imposes an inheritance tax, which is due when anyone inherits from the deceased person. (The current spousal rate is 0%) If the estimated amount of inheritance tax is paid within three months after the death, a 5% discount is given against the tax due. Final payment of the inheritance tax is due 9 months from date of death.
After the inheritance/estate taxes and decedent’s debts have been paid, the executor will be able to distribute the remainder of the estate. The executor must prepare a final accounting, showing what the estate contained, how the assets have been managed, and the plan for distributing them to beneficiaries. It’s common for the beneficiaries to approve the accounting by signing a document called a family settlement agreement. But an executor who thinks that creditors might come up with claims later might choose to also file the formal accounting with the court; if approved, this will cut off the rights of third parties to make a claim from the estate.