Haws & Burke, PC Haws & Burke, PC - Law Firm & Attorney

Estate Administration

Although the probate process in Pennsylvania is fairly straightforward compared to other states, there are requirements and deadlines which must be met appropriately in order to avoid adverse tax and legal consequences for the Executor and/or beneficiaries.

Probate

In the estate administration process, the word "probate" simply means "to prove" the validity of the Will. In some states a Will may have to be authenticated by a Judge. Pennsylvania avoids this delay by permitting a Will to be self-authenticated when it is signed, thereby streamlining the process when the Will is later probated.

A properly drawn Will should name an executor to represent the estate. In the absence of a properly drawn Will, our preparation for probate is more complicated.

We assist you, as the executor, in the probate process by preparing the probate petition. You will present the Will and the petition to a clerk at the Register of Wills Office who prepares a document known as Letters Testamentary which verify that you have been recognized by the Register of Wills as the person authorized to represent the estate and handle all assets titled in the decedent's name which pass under the Will. The visit to the courthouse usually ends by paying a modest probate fee and by receiving "short certificates" which verify your appointment as executor. This appointment empowers you to sell real estate, sell stocks, handle financial matters, sign tax returns and many other functions on behalf of the decedent's estate.

Early in the estate administration, we advertise the estate to help protect you and the estate from claims not properly and timely made.

We assist you in collecting assets passing through probate. These assets provide funds for the distributions to beneficiaries and for payment of the decedent's outstanding bills, funeral expenses, final lifetime income taxes, inheritance taxes, administration costs and so forth. We will track each asset and expenditure to assist you in the preparation of the tax returns. This tracking process also provides a record of your actions as executor to be presented to the beneficiaries later for their approval and to protect you against claims.

We help you avoid mistakes, such as the commonly held belief that there is no estate or inheritance tax on assets passing outside of probate. Neither the federal government nor the PA Department of Revenue makes an exception for non-probate assets.

Many duties must be completed regardless of whether there was a probate. We assist you in preparing the final lifetime federal and state income tax returns, the PA inheritance tax return, and perhaps a federal estate tax return.

Normally probate in Pennsylvania does not prolong the estate administration. Rather, it is the tax returns described above which consume the most time in completing the estate administration. We will meet with you regularly, assure that deadlines are met and keep the process moving toward conclusion.

If there is a probate, we prepare an inventory listing the probate assets and file a status report with the Register of Wills when your duties have been completed.

Finally, we provide guidance as to the best way to conclude your duties with as little liability risk to you. While you may choose to have us prepare and file a formal accounting for Court approval, the overwhelming majority of estates are concluded with an informal accounting to the beneficiaries and the signing of an agreement by the beneficiaries stating their approval of the executor's handling of the estate and the filing of a status report with the Register of Wills. We will guide you as to the best course to follow and prepare the documents for your protection.

A common misconception is the belief that attorney's fees are higher on probate assets than on non-probate assets. While some attorney's fee schedules provide for this option, we match our fees with the amount of work we do and not on how the assets pass to the beneficiaries. We openly discuss our fees and document the fee arrangement in writing. Our goal is that when work has been completed, you feel that you were well represented, paid a fair fee and would be pleased to recommend us and have us represent you on another matter. Correspondingly, we want to feel that we did an excellent job for you, were fairly compensated and would be pleased to represent you on another matter.

Asset Valuation and Taxes

The estate's assets must be properly valued for taxes and other purposes before being transferred to the beneficiaries. This can be particularly important with respect to stock holdings or real estate, which can impact capital gains taxes which may need to be paid later by beneficiaries.

We will advise you on determining the amount of any inheritance tax prepayment you may choose to make, to obtain a 5% discount and reduce the tax burden.

We will prepare the Pennsylvania inheritance tax return, including maximization of allowable deductions to reduce the estate's tax burden. Proper valuations must be used on the tax return to avoid adverse tax consequences for your beneficiaries.

We will prepare, if necessary, the federal estate tax return, including claiming of a Deceased Spouse's Unused Exemption amount using the technique of portability, to reduce or eliminate the potential federal tax burden for the surviving spouse.

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