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The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. The Federal Estate Tax generally affects only large estates with assets in the millions of dollars, and the tax rates are quite high, with an upper rate of 45%. A typical estate administration will consist of presenting a Petition for Probate to the Register of Wills, opening an estate account and marshalling assets to that account, preparing and filing a Pennsylvania Inheritance Tax Return, and making distribution of assets to the estate beneficiaries. Stocks and marketable securities must be identified and secured, and they may be sold with the proceeds deposited into the estate account. Estate of Bruner, 456 Pa. Super. You may be picked for this job. The executor or administrator of the estate is entitled to reasonable compensation for taking on this role. There is a special process for small estates in Pennsylvania that facilitates the transfer of property left … Some executors will decline compensation, but it really is a job that takes significant time. Enforcement of contribution or exoneration of Federal estate tax. We will help you meet your fiduciary duties, file the necessary tax returns, and properly account to the estate beneficiaries. There are four taxing systems to consider and pay, if necessary: The Pennsylvania Inheritance Tax; the Federal Estate Tax; the Decedent’s final lifetime income tax returns (Pennsylvania and Federal); and the income tax returns for the estate (Pennsylvania and Federal). If no will exists, or if the named executor is unavailable, then an estate administrator, normally a close family member, will be appointed by the Register of Wills in accordance with Pennsylvania law. The personal representative is charged with the actual administration of an estate, and has the responsibility for performing all functions that are required. Whether you will receive any money or property will be determined wholly or partly by the decedent’s will. The Federal Estate Tax Return, if any is required, is also due within nine (9) months of the date of death. Intestate Succession in Pennsylvania Wills and estate planning lawyers help resolve intestate succession concerns . He is the overseer of all estate property and has a legal duty to the beneficiaries of the estate to protect and maintain all estate assets. During the administration of an estate, federal and state income tax returns must be filed showing the income and expenses of the estate. Johnson Estate Determining executor commissions and attorney fees based upon the size of the estate is certainly simpler than considering a large number of factors in each case, particularly for relatively routine estate administrations and for estates in which no objections are raised to the commissions and fees claimed. One important step in the process is evaluating tax matters. It may also be of interest to bank trust officers and paralegal studies students because of the clear and concise manner in which it was written. Pennsylvania Inheritance Tax Our office will prepare the Pennsylvania inheritance tax return. Johnson Estate Determining executor commissions and attorney fees based upon the size of the estate is certainly simpler than considering a large number of factors in each case, particularly for relatively routine estate administrations and for estates in which no objections are raised to the commissions and fees claimed. It emphasizes the proper procedural steps to be taken at each stage of estate administration. It is also important to determine whether a safe deposit box exists so that it can be searched for a will. Turn to Pennsylvania Estates Practice for expert guidance on the proper steps to be taken in administering an estate in Pennsylvania. ESTATE ADMINISTRATION CHECKLIST I. Assets passing to other persons (e.g., friends, cousins, nieces or nephews, etc.) Related Practice Areas. Get free shipping on law books. Let us handle the paperwork and tax matters, so you can be confident that details are being addressed properly. 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. Estates may be concluded in one of two ways. Learn more about state-specific laws on our probate and estate administration legal answers page. •Bequests to charitable entities are exempt from Pennsylvania inheritance tax. _____ 3. Under this circumstance, the person who is appointed to administer the estate is referred to as an administrator, in contrast to an executor who is appointed to administer the estate of someone who died with a will. are taxed at the rate of 15%. The Pennsylvania Inheritance Tax Return is due within nine (9) months of the date of death, although a five percent (5%) discount may be obtained if a prepayment is made within ninety (90) days of the date of death. Assets are converted […] This death tax must be paid by the estate within nine months of death in order to avoid penalties and interest. We want to hear from you. _____ 1. Review Will and any related documents. Have required minimum distributions been made from retirement accounts? THIS NOTICE DOES NOT MEAN THAT YOU WILL RECEIVE ANY MONEY OR PROPERTY FROM THIS ESTATE OR OTHERWISE . After the Will is located (or it is determined that the decedent had no will), the next step in estate administration is to probate the estate and to have a personal representative appointed. Assets that pass to the decedent’s siblings are taxed at the rate of 12%. Definition of Probate In Pennsylvania, probate is the legal process that happens after a person (the " decedent ") dies, regardless of whether the person died with or without a valid will. Assets that pass to the decedent’s siblings are taxed at the rate of 12%. This is done by going to the Register of Wills in the County in which the decedent resided. The current rates for Pennsylvania inheritance tax are as follows: •The tax rate for transfers to lineal heirs (father, mother, child, stepchild, or their spouses) is 4.5%. Philadelphia, PA Estate Administration, Litigation - Trusts and Estates, Trusts and Estates Nina B. Stryker is a partner with Obermayer Rebmann Maxwell & Hippel LLP. _____ 2. Statute of Limitations on Creditor Claims. Given today's low interest rates, it is normally advisable to make this advance payment if sufficient liquid assets exist. The personal representative’s job is to carry out the provisions in the Will. Rule 10.5 . •The tax rate for transfers to a spouse is zero. In some cases, however, avoiding the formal probate process may result in savings. http://www.paestateplanners.com/ There's no denying that the death of a loved one brings about sadness, life changes and difficult times. Also, a thorough search for important documents must be conducted, including the original Will, Trusts, evidence of a safety deposit box, and financial records. Attorney Advertising. Apportionment of Federal generation-skipping tax. Apportionment of Pennsylvania inheritance tax. The above overview highlights the issues and tasks of the personal representative during estate administration. The selection of a calendar tax year versus a fiscal tax year for the estate has consequence. We’ve been helping people just like you for years with trust and estate matters, and protecting executors and trustees from liability by avoiding common mistakes. Second, if all beneficiaries are in agreement, they may each sign a “Receipt and Release” that our office would prepare and which would approve the administration and distribution of the estate. This website is designed for general information only. However, this is not necessarily the case. These are known as fiduciary income tax returns and may be filed on a calendar year basis or on a fiscal year. It is a mistake to pay creditors out of the statutory priority if the estate is insolvent. from … There are many factors involved in the Pennsylvania probate system, including estate size, value, and complications such as number and type of heirs. Our firm will make your job easier and help you avoid costly mistakes that could otherwise subject you to personal liability. You may have little idea of what is involved. If a decedent dies with a will, then their property is distributed according to the will. Legal fees will be reasonable, and disclosed up front in writing. It is important to remember that the personal representative acts in a fiduciary capacity caring for matters that financially impact others, and those responsibilities must be taken seriously. Essentially any estate worth more than $50,000, not including real property like land or a home and other final expenses, must go through the probate court process under Pennsylvania inheritance laws. We have flexible fee arrangements and can help on a fixed fee or hourly basis. § 3704. Short title of chapter. Letters Testamentary will be granted (or Letters of Administration in the case of intestacy), which Letters give the personal representative the authority to act on behalf of the estate. Peter Klenk is the founding member of Klenk Law, a seven attorney boutique estate planning law firm. If the estate is potentially insolvent, it is important not to pay creditors until all debts have been identified. He must open an estate account using a Taxpayer Identification Number to hold liquid property, request the Post Office to forward the decedent’s mail, and conduct an inventory of any safety deposit box. In general terms, the process of administering a decedent’s 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 the decedent’s Will, or where there is no Will, under the laws of intestacy. Estates and trusts are taxpayers for Pennsylvania personal income tax purposes. If you have been designated to serve as executor, a close friend or relative considered you to be a trustworthy person, and capable of carrying out the provisions of his or her will. Estate Administration in Pennsylvania for ‘Dummies’ by Tom Wolpert on February 15, 2014. Uniform Fiduciary Access to Digital Assets § 3901. Sometimes a decedent's taxable income is very low, especially if the death occurred in the beginning of the year. At Gerhard & Gerhard, P.C. we limit our practice to estate planning, estate administration, and elder law. Prepare and file decedent's final lifetime income tax returns, federal and state (due April 15 of year following death). § 3903. . This includes following the directions of the decedent (the deceased person) if there is a will, or following the requirements of the law if there is not a will. Making the right choice can save taxes and minimize administrative costs. 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