Probate, a legal process that seems puzzling for many, is often essential for settling a deceased person’s estate. Pennsylvania law specifies when probate can be avoided or when it becomes mandatory. Despite varying situations, the process can be confusing without proper guidance.
This article will help to explain some of the more important aspects of the probate process and provide insight into when probate is required in Pennsylvania. Having this information may help individuals in making informed decisions during a challenging time.
What Is Probate?
Probate is the legal process that occurs after a person’s death. It involves validating a Will if one exists and settling the deceased person’s financial affairs. A personal representative or executor, typically named in the Will, is responsible for managing this process. If no Will exists, the Register of Wills will designate an administrator to handle the estate.
Generally speaking, the probate process includes collecting the estate assets, settling the estate’s outstanding debts, paying taxes, and then distributing the remaining estate assets to the specified beneficiaries or heirs. The Orphans Court in the County in which the estate is opened will resolve any disputes that cannot be resolved by the various parties in interest.
How Does a Probate Process Work?
Step 1: Application for Grant of Letters Testamentary or Letters of Administration
The probate process begins after the death of an individual with the filing of a petition for probate and a grant of letters. This legal proceeding takes place in a county of probate, where the deceased resided at the time of death.
The petition includes critical information like the deceased person’s information, heirs, last Will, if any, and the estimated estate value’s financial assets, among other things. The original death certificate and the original Will, if any, along with certain other documents, are attached to the request.
Step 2: Collection of Estate Assets
Upon securing the “letters testamentary” for a testate estate or “letters of administration” for an intestate estate, the executor or administrator can start collecting and managing—and often selling or liquidating—the probate assets. The estate assets may include real property, personal property, and financial accounts.
The collection process often involves appraising and sale of real estate and personal property. The Estate is advertised, and certain legal notices are sent to the estate’s heirs or beneficiaries. In many circumstances where charities are involved, notice is also sent to the Commonwealth’s Attorney General’s Office, and an assistant attorney general is assigned to follow the probate process.
Step 3: Notifying Creditors and Paying Off Debts
Notifying known creditors is an essential function that often involves sending legal notices and posting advertisement notices in local circulation newspapers. Creditors then have a certain amount of time, generally one year, from the publication notice date to file their claims.
The executor pays the verified claims, including funeral expenses and administration expenses, from the estate assets. If claims exceed the value of estate assets, the state’s law will determine the priority of payment.
Step 4: Distribution of Remaining Assets
After creditor claims are paid, including individual federal, state and local taxes, inheritance taxes and estate fiduciary taxes (if any), the remaining probate assets are distributed to the heirs or beneficiaries, depending on whether the decedent died testate or intestate (with or without a Will). A proper distribution plan involves adhering to the Will’s instructions or following the intestate succession laws of Pennsylvania if there is no Will.
The executor ensures the asset distributions are completed accurately to avoid improper distributions and personal liability.
Step 5: Achieving Estate Closure
Closing the estate is the final step in the probate process. This may be completed formally or informally, depending on the circumstances. On a formal basis, the representative, usually through their attorney, petitions the Orphans Court for a decree of distribution and provides the Court with a final accounting that outlines the estate’s activity from the time of death until the proposed closure. Upon the Court’s approval, the personal representative proceeds to distribute the remaining assets, if any, and the estate is officially closed. More informally, the estate can be closed with a Family Settlement Agreement, Accounting and Schedule of Distribution.
It is always recommended that you consult with an attorney before deciding whether to close the estate formally or informally since there are advantages and disadvantages to each option.
When Is Probate Required in Pennsylvania?
Existence of a Will
The presence of a Will doesn’t avoid probate in Pennsylvania. On the contrary, the Will has to go through probate to verify its validity.
Type of Estate Assets
The type of property and how it was owned—that is, how the property was titled—at the time of death plays a significant role in determining if probate is required. Assets owned solely by the deceased person or jointly without rights of survivorship usually require probate. Conversely, jointly owned property with rights of survivorship or items with designated beneficiaries, like life insurance policies or retirement accounts, typically bypass the probate process but not necessarily inheritance taxes.
Total Worth of the Estate
The overall net value of the estate assets may also determine whether probate is necessary. Pennsylvania law provides a simplified process for smaller estates, which might avoid the more formal probate process. However, estates with greater values may require the probate process for proper handling, including proper asset valuations and ensuring the appropriate filing of accurate inheritance tax returns and other tax returns.
Outstanding Debts
If the deceased person had outstanding debts, probate may be necessary. The probate process gives creditors a chance to present their claims, ensuring that all valid debts are paid before the estate property is distributed. It also limits the time creditors have to make their claim, which acts to protect the estate’s personal representative and its beneficiaries and/or heirs against late claims.
Disagreements Among Beneficiaries
In instances where there is conflict or disagreement among beneficiaries or heirs, probate may be required. A probate judge can make binding decisions, ensuring the decedent’s wishes are carried out as stipulated in the Will. This process also helps to avoid improper distributions and maintains peace among beneficiaries, which may be strained.
No Beneficiaries
When a person dies without a Will and without clear beneficiaries, probate is usually invoked to determine the rightful heirs. The intestate laws in Pennsylvania will dictate the distribution order for lineal descendants and the decedent’s relatives. These laws ensure a fair distribution despite the absence of a Will.
Experiencing Probate Confusion? We Can Help
Don’t let the probate process add stress in an already difficult time. Our expert team at Heiligman & Mogul, P.C., is ready to shoulder your legal burdens, guide you smoothly through the probate process, and ensure the proper distribution of your loved one’s estate. Contact us today, and let us handle every legal requirement with due care and precision.
Let us turn your uncertainties into a clear path forward and pave the way for a less stressful tomorrow. We’re here for you when you need us the most.