ANSWERS ABOUT
ESTATES
What
is Estate Administration?
What is Probate?
Is it possible to avoid Probate?
How Long
Does It Take to Settle an Estate?
How Much
Does It Cost to Administer an Estate?
Can
an Executor or Administrator Handle the Estate without an Attorney and
Avoid all those Fees?
What
Is Estate Administration?
Estate
administration is the collecting of Estate assets, the payment of Estate
liabilities, payment of the Pennsylvania or Federal death taxes, filing
of appropriate paperwork and getting the right assets to the right
people.
What
is Probate?
Probate”
is technically the filing of a Will, or opening up an Estate, at the
Office of Register of Wills at the Courthouse in the County in which you
live.
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Is
It Possible to Avoid Probate?
The answer is, “It depends.”
Probate is not something that should be avoided like
cancer. Probate provides a mechanism, regulated by law, for handling
your assets when you die. If your assets are large or if there are any
problems with heirs, it is probably best to go through probate.
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How Long
Does It Take to Settle an Estate?
This question cannot be answered easily, but here are some
guidelines:
-
If you are married and nothing unusual is going on (e.g., all
your assets are “jointly” held with your spouse and you don’t have
a business in your name) an Estate can be “settled” by filing the
death certificate at the Register of Wills of your home county.
-
If you are single and have very few assets, filing the death
certificate might be all that is needed.
-
If you have a house or other assets in your name, singly or
jointly with a person not your spouse, a Pennsylvania Inheritance Tax
Return must be filed within nine (9) months of your death. It usually
take Harrisburg 90-120 days to approve or disapprove the Return.
Sometimes, however, if an Estate has relatively few assets or for other
reasons is easy to administer, a Return can be filed within a few
months. My general rule is that it takes at least eight to twelve months
to administer and close up an Estate.
-
If your Estate is large or otherwise complex it can take years
to administer. As noted, a Living Trust is usually not the answer to
estate planning problems. Usually it just creates more problems.
The best advice for anyone engaged in estate planning is to
consult a knowledgeable attorney and follow his or her advice!
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How Much
Does It Cost to Administer an Estate?
There are
three kinds of fees generally associated with Estate Administration:
-
Probate
Fees.
These are set by the Register of Wills of the County in which
you live. The larger the Estate, the higher the fees. You can call
the Beaver County Register of Wills at (724) 728-5700 for more
information.
-
Inheritance
Tax.
These are set by the Commonwealth of Pennsylvania. There is no tax
on assets from one spouse to another, and to qualified charities. There
is a four and a half percent (4 ½ %) tax on assets from parent to
child, grandparent to grandchild, child to parent, etc. There is a
fifteen (15%) percent tax on assets from sibling to sibling, or between
people who are not related. Jointly held property is taxed at lower
rates.
-
Attorney’s Fees.
These are set between the personal
representative of the Estate (the Executor or Administrator) and the
Attorney. Pennsylvania rules require that the fee agreement be in
writing and that the client receive a copy of the agreement. Most
attorneys charge a fee based on a percentage of the gross assets of the
Estate. Some simply charge a flat fee. However, if a problem arises
between the personal representative and the attorney over fees, the
Probate Judge of the County can sometimes set the fee
The best answer
to this question is, “It all depends.”
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Can
an Executor or Administrator Handle the Estate without an Attorney and
Avoid all those Fees?
Not quite.
You will still pay Court costs and Inheritance Tax or Estate Tax. There
are plenty of filing deadlines and paperwork requirements that a
non-attorney is unfamiliar with and will probably mismanage. It is often
far simpler to pay an attorney to do all the worrying and handle
everything. Besides, a “do-it-yourself” person should always remember
Abraham Lincoln’s famous line: “A person who represents himself has a
fool for a client”!
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For more detailed answers on these
or any other legal matters,
please feel free to contact me at my office.
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