Start of Probate Process without a Will

If a loved one has passed away without a will, the laws of intestacy will govern how their estate is handled. The closest kin can apply to the Register of Wills to be designated as the administrator of the estate. They will also be granted a short certificate has proof of their authority to handle the estate.

The administrator would then have the responsibility for identifying all the assets and debts as well as beneficiaries and their contact information and maintaining the estate until final distribution. If the decedent was married and does not have any children or surviving parents, the entire estate goes to their surviving spouse. If there were parents, the first $30,000 goes to the surviving spouse as well as half of the remainder of the estate.

If there are children of the marriage, the first $30,000 goes to the surviving spouse as well as half of the remainder of the estate also. If there are children of the decedent only, the surviving spouse gets half of the estate. The remaining half of the estate, or in the event the decedent is not married, the entire estate, shall pass in the following order: (1) to the decedent’s children; (2) to the decedent’s parents; (3) to the decedent’s siblings or their children; (4) to the decedent’s grandparents; (5) to the decedent’s aunts and uncles and their children and grandchildren. If there are multiple persons in a category, they will each receive equal shares such that a decedent with three children would have the estate separated into thirds.

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Start of Probate Process with a Will

After a loved one has passed, one of the first steps to be taken is to determine if they have a will. If so, you will want to locate the original will and make sure it has been properly signed. Ideally, the will has a self-proving affidavit so that the witnesses to the will do not need to be present when the will goes to probate. If there is not a self-proving affidavit, someone with knowledge of the deceased’s signature would need to verify the signature. In some counties this must be done in person. The named executor will need to go to the Register of Wills with the original will, photo identification, and some method of payment to open the estate.

The Register of Wills will give the executor a short certificate of letters testamentary. This document authorizes the executor to handle the decedent’s estate. The executor will likely need to appear in person at the appropriate county office throughout the probate process. For this reason, it makes sense to name an executor that lives in the area. You should also be careful if selecting co-executors as they need to agree on how to proceed. The executor should identify all the assets and debts as well as beneficiaries and their contact information. Real property should be secured and maintained, including keeping up with any mortgage, homeowners insurance and taxes in the interim.

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Guardian of Estate of a Minor

Minors may not be able to receive assets left to them due to their age. In that scenario, a guardian for the estate of the minor must be appointed. A parent cannot be the sole guardian of a minor’s estate. A co-guardian must be named or a corporate fiduciary alongside the parent. If the appointment of a guardian is not contested, this can be accomplished without a hearing in Bucks County. An inventory of the minor’s estate must be provided to the court however yearly reports are not necessary. Additionally, the guardian or co-guardians must post bond based on the value of the estate coming into their control unless the court feels it is unnecessary. Corporate fiduciaries are exempt from the bond requirement. Disbursements may be made for the minor’s support and education as deemed reasonable by the guardian without further court order.

In some circumstances, it is not necessary to have a guardian of the estate appointed. Specifically, if the minor stands to gain less than $25,000 the court rules permit distribution to a restricted access account. The parent of the child can oversee this type of distribution. The court would order the funds to be deposited into a savings or investment account in the child’s name. Withdrawals are not permitted except by court order. The child then takes control over the account once they are 18 or older.

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Guardianship of the estate of a minor vs. estate of a person

There are two types of guardianship for minors: guardian of the person and guardian of the estate.

Guardian of the person is necessary when a minor does not have a parent to make decisions on their behalf.

For guardian of the person, the guardian must be a responsible adult who is willing to take care of the child. Once the minor reaches 14 years of age, he or she will have input as to whom the guardian should be. A parent need not apply for guardianship of the person as they have legal rights as a parent. The guardian may continue to act in this capacity until either removed by the court or when the child reaches the age of majority.

Guardian of the estate occurs when a minor comes into possession of a large sum of money, such as an inheritance or life insurance policy.

Under §5112, For guardian of the estate, the guardian must be an adult or a corporation acting as fiduciary. A parent may not be the sole guardian of the estate, but may act as co-guardian. The guardian may continue to act in this capacity until either removed by the court or when the child reaches the age of majority.

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Wills For Heroes – May 14, 2016

Bucks County has a “Wills for Heroes” event this upcoming Saturday, May 14, 2016. This is a program in conjunction with the Pennsylvania Bar Association that provides free wills, living wills, and powers of attorney to first responders and their spouses/significant others. Proof of military or public service affiliation is required. Appointments are required and can be made on the Pennsylvania Bar Association website. Each appointment is for one hour. At the conclusion of the appointment, each participant will have their final, notarized documents to take home with them. If a spouse or significant other is also participating, their appointment will be immediately following that of the first responder. The program is made possible through the time of volunteers including attorneys, reviewers and witnesses.

This week’s “Wills for Heroes” event is being held at Bucks County Community College, Lower Bucks Campus, 1304 Veterans Highway, Bristol, PA 19007. The event starts at 11 a.m. For more information, you can visit www.pabar.org/wfh/. Our firm is also able to assist with estate planning documents at a reasonable cost including wills, living wills and powers of attorney. Please contact our office if you would like additional information or to set up an appointment.

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Estate Accounting

One of the most important duties of the executor or administrator is keeping an accurate accounting of the estate assets. Prior to distribution, an executor should prepare an accounting of all of the assets and liabilities of the estate, including all sources of assets (i.e. bank accounts, refunds, sale of real estate) and all liabilities paid and still outstanding (i.e. funeral costs, unpaid credit cards, medical bills).

The accounting must accurately show what went into the estate, what went out, and what is left to be distributed amongst the heirs.

An account is necessary whenever there are multiple beneficiaries receiving a percentage of the residuary estate, or when the executor goes to court to file for an insolvent estate, or when there is a dispute amongst heirs. Without it, the court and/or beneficiaries have no way of determining whether the executor did something inappropriate.

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Do you need a will?

Do you need a will? Most people don’t think so, or don’t get around to it. While an estate can proceed without a will, i.e. by intestacy, a will can resolve many problems.

For example, if you have minor children, a will can designate guardians in case both parents pass away. Likewise, you may appoint a trustee to handle money and gifts that are to be left to children who aren’t yet responsible. You can also put money into trust for children who are adults but not fully responsible. You don’t want an 18-year-old to spend their entire inheritance on an expensive car or a trip to Europe when he or she can use the funds to help offset college expenses or for a down-payment on a house.

Another reason to have a will is when you wish to appoint an individual to be the executor – the person in charge of carrying out your wishes and moving the estate through probate. Without a will, your children or spouses who don’t get along may all wish to become executor or administrator. This can cause many problems and may require court action – something a will can avoid.

You may also give designate certain personal items or money to go to friends or family who otherwise wouldn’t inherit.

For these reasons, it is advisable for everyone to get a will, even if you don’t think you have anything to leave behind.

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Inheritance Tax

Pennsylvania is one of a handful of states that requires a tax paid on inheritances. There is also a federal estate tax, but your estate is exempt as long as your estate is valued at less than $5,450,000 for 2016. Pennsylvania, on the other hand, has no minimum threshold.

The inheritance tax in Pennsylvania only covers tangible property (i.e. furniture, clothes, collectibles, vehicles) and real estate located in Pennsylvania.

Furthermore, there are several exemptions: spouses, parents inheriting from a child who passed away before reaching the age of 21 years, charities, and the government.

The tax rates are as follows:

Spouses: 0%

Children: 4.5%

Parents: 4.5%

Siblings: 12%

Other beneficiaries: 15%

You must file the inheritance tax within 9 months from the date of death, or else there may be penalties and interest. However, you get a 5% discount when the tax is paid within 3 months of passing.

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Opening an estate

In order to open an estate, you must go to the courthouse located in the county where the decedent was residing when he or she passed away.

The executor must bring the original will, signed and witnessed by the decedent. The executor(s) named in the will must be present. If the executor does not wish to handle the estate, then they will need to sign a renunciation which will be presented to the Register of Wills. In this case, the alternate executor can proceed. The court also requires the executor to bring photo identification (i.e. drivers’ license).

Finally, you will need to pay the filing fees, which are based on the size of the estate, plus costs for each short certificate.

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Dying without a will in Pennsylvania

When you die without a will, your state’s intestacy statute dictates how your estate is distributed. For the most part, only assets in your own name are transferred through the probate process. For example, life insurance proceeds or retirement accounts with beneficiaries pass directly to the designated beneficiaries. Also, real estate owned as joint tenancy with right of survivorship or tenancy by the entirety passes directly to the survivor(s).

In Pennsylvania, assets are distributed as follows:

If you leave a spouse and children (and all children are also children from your spouse):

Spouse gets $30,000 plus ½ of the remainder, the children get the remainder.

If you leave a spouse and children (and at least one child is from a different parent):

Spouse gets ½ of the estate and the children share the remaining ½.

If you leave a spouse and no children, but your parents are still alive:

Spouse gets $30,000 plus ½ of the remainder, your parent(s) get what’s left.

If you leave a spouse and no children or parents:

Spouse inherits everything.

If you leave children, and no spouse:

Children inherit everything.

If you leave parents, but no spouse or children,

Parents inherit everything.

If no parents, spouse, or children survive you:

Siblings inherit everything.

If you have no parents, spouse, children, or siblings, then your estate goes to grandparents, aunts & uncles, and cousins. If this is the case, it is best to speak with an experienced attorney as it can get complicated.

If you have no living relatives, then the estate eventually goes to the Commonwealth of Pennsylvania.

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