Pennsylvania Estate Planning & Administration Attorney
A person’s estate is merely all of the assets that you own, for instance, your car, real estate, bank accounts, cash, and stocks and bonds. Whether your estate is big or small, you have to take action to preserve these assets and ensure that your wishes for your assets are carried out after you die. Without an estate plan, the state of Pennsylvania determines what happens to your estate assets.
A will is a legal document which allows a person, the “testator”, to state, with specificity, what they want to happen with their property and assets after their death. No one wants to think about their own death, but it is important for everyone to make sure that their family and loved ones are taken care of if anything should happen to them.
When is a good time to think about getting a will?
When you have kids
When you buy a house
When you are going on a trip
When there is a death in the family
When you are starting a business
Estate Administration Lawyer in PA
When you die, the process of administering your estate involves collecting all assets, locating all creditors, paying all debts, paying all applicable taxes, and then distributing the remaining assets to the persons entitled to inherit under your Will, or where there is no Will, under the Pennsylvania intestacy laws. Assets that have a named beneficiary, such as life insurance, retirement plans or certain accounts, will pass to the named beneficiary, and jointly owned assets may pass to the joint owner, although the exact wording must be checked. All of this must be meticulously tracked and accounted for, approved by the court, the Pennsylvania Department of Revenue, and the Internal Revenue Service (IRS). This process is very tedious and is highly regulated.
Did the decedent die with a Will (testate) or without a Will (intestate)? How do you go about collecting of the necessary documents to probate the estate with the court? Who gets paid and who takes as a beneficiary? How much taxes are owed? These are all important questions that must be answered by the executor or administrator of a decedent’s estate.
When a Will is located or it is determined that the decedent had no will, the first step is to probate the estate and to have a personal representative appointed. This requires a trip to the Register of Wills in the jurisdiction where the decedent resided. The Register of Wills will grant Letters Testamentary if a person died with a will or Letters of Administration in the case of intestacy. These Letters give the personal representative the authority to act on behalf of the estate. These Letters must then be advertised to discover creditors and the Probate fees must be paid. The Register of Wills also issues Short Certificates to the personal representative, which are used to conduct estate business, such as closing bank accounts, obtaining date of death values, and transferring property.
The Pennsylvania Inheritance Tax Rate depends on the relationship between the decedent and the beneficiary that receives assets. Under present law, there is no Inheritance Tax on assets that pass to the decedent’s spouse. Assets which pass to the decedent’s lineal descendants (children and grandchildren) are taxed at 4.5%. Assets that pass to the decedent’s siblings are taxed at the rate of 12%. Assets passing to other persons (e.g., friends, cousins, nieces or nephews, etc.) are taxed at the rate of 15%.
Estates may be concluded in one of two ways. A formal accounting may be filed with the Court for approval, or if all beneficiaries are in agreement, they may each sign a “Receipt and Release”. This is often more cost effective, and less rigorous and time-intensive.
