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DECEDENT’S ESTATE SETTLEMENT When a person dies, it
is often necessary to settle the estate formally which is called Estate
Administration and referred to most frequently as PROBATE.
There are state and federal laws that apply and must be strictly
followed. In a nutshell, Estate
Administration includes filing a petition to have Letters issued and a personal
representative (Executor or Administrator) gathering assets, paying debts, taxes
and expenses, filing legal reports, complying with all other legal requirements,
distributing assets to beneficiaries and/or heirs and formally closing the
estate. THE WILL AND THE SAFE DEPOSIT BOX It
is illegal in Pennsylvania to enter a safe deposit box (except for spouses)
without notifying the Pennsylvania Department of Revenue or its authorized
representative so that the contents of the box can be inventoried before
anything is removed. NOTE:
The Will and cemetery deed can be removed by the Executor when one
financial institution witnesses and records the entry and removal of these
documents. IS PROBATE REQUIRED?In
nearly every case where a person dies owning property (personal real estate), an
estate must be opened at the Register of Wills (PA) or Surrogate’s office
(NJ). WHO IS IN CHARGE? The
estate is administered by the personal legal representative of the deceased.
If there is a will, this person(s) is called the "executor." If
there is no will, that person is called the "administrator".
The law sets out the priority of who will serve as administrator, usually
the surviving spouse, then children. The
personal representative usually will hire an attorney in complying with the many
legal requirements of estate administration and settlement. The Executor or administrator is legally
responsible for administering the estate, and has the responsibility for
performing all required functions. These responsibilities also include following
the directions in Will, or the intestate code when there is no Will. IS AN ATTORNEY REQUIRED? Except
in the smallest of estates, most representatives will need legal help from an
attorney who is often the one who prepared the will. WHAT ARE THE VARIOUS STEPS INCLUDED IN ESTATE ADMINISTRATION? All
assets (personal possessions, cash bonds, IRAs, etc. and real estate), are
inventoried taken over by the legal representatives, beneficiaries and heirs are
informed of their interest in the estate, expenses, debt, taxes are paid, and a
final accounting of the administration is prepared for beneficiary/heir or court
approval. When approved assets are
distributed. WHAT
ARE SOME OTHER CONSIDERATIONS? The
Family Exemption, decedent’s wages due; payment of funeral bills; Will
contests; common law spouse issues; step children, court audits; separated but
married surviving spouses; spousal right of election against the Will, abatement
of gift; lawsuits by or against personal representative; priority of payments,
non-probate assets; insurance and much more. WHAT ABOUT FEES?In
addition to court costs, attorney fees are frequently based on a percentage of
the gross value of the estate and/or as otherwise agreed, i.e. a flat fee,
hourly rate and to the personal representative who is also entitled to a fee,
often the Executor/Administrator will forgo the fee because it is income and
taxable at that individual’s income tax rate. The fees are estate expenses.
Fee agreements should be made at the first meeting with the attorney and put in
writing. Ó 2003 James
W. Pearson, Jr., All Rights Reserved FOR
ADDITIONAL INFORMATION CALL THE TOLL FREE HELP LINE 1-888- 565-3700 E-mail: jpearson@eckellsparks.com JAMES
W. PEARSON, JR. Chair of the Federal & State Credit Union Department & Coordinator of legal consultations under the Family Legal Care Plans offered to credit union members. Eckell, Sparks, Levy, Auerbach, Monte, Rainer & Sloane, P.C. 344 W. Front Street, Media, Pa. 19063 |
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