Here are the answers to some questions that clients frequently ask about Estate Administration & Probate. These FAQs are provided for general information only and are not intended to be relied upon as legal advice. For a consultation, please contact us.
Probate is the process whereby a deceased persons affairs are concluded and the estate property is transferred to their beneficiaries. Probate is also known as estate administration, and it is managed by the individual or institution appointed as executor or administrator of the estate. Generally, the tasks to be completed during the probate process include:
In some states, probate is an expensive, complex, and overwhelming task. This reality has led to a general public belief that probate should be avoided at all costs. However, in Pennsylvania, the probate process is generally inexpensive, simple, and straightforward. There is rarely a good reason to avoid probate in Pennsylvania, particularly because the effective administration of the probate process will extinguish the claims of creditors and help ease disputes between family members and other beneficiaries.
If the deceased person left a will, it will almost always name an “executor” who will administer the estate. When a person dies intestate (without a will), or when a named executor is unable or unwilling to serve, the Register of Wills will grant “letters of administration” to an heir, family member, or creditor of the estate. The person seeking to administer the estate must file a petition with the Register of Wills, and if there is more than one petitioner, the administrator will be chosen based on a statutory order of priority, starting with the residual beneficiary of the estate.
A revocable living trust is an estate plan that is marketed nationwide by many businesses and attorneys. The main benefit of the revocable living trust is that, if executed 100% correctly, it can avoid probate proceedings. In Pennsylvania, unlike many states, probate is a relatively inexpensive, simple and painless process, and there is no reason to avoid it. Thus, a Pennsylvania resident is generally not served well by having a revocable living trust, which can be expensive and cumbersome to set up.
Revocable living trusts do not save any taxes. Many salespeople sell these trusts with the false promise of tax savings, and it simply is not true in Pennsylvania.
There are instances when a person should consider implementing a revocable living trust, but it is a very situation specific decision, which should be made with the input of a qualified estate planning attorney. Revocable living trusts are not a one size fits all estate plan.
If the assets of an estate are insufficient to pay its debts (including taxes and administrative expenses) the estate is considered “insolvent.” One of the responsibilities of an executor (or administrator) is to ensure that the debts of the deceased are paid. Pennsylvania law provides that debts should be paid in the following order of priority:
If there are more debts than assets, the creditors are paid in the above order, and creditors which don’t receive full payment will be paid proportionately from the remaining funds.
Neither the executor, nor the spouse or anyone is responsible for paying debts of the estates from their personal funds. However, there are exceptions to this rule, and if you are involved with the administration of an estate, you should contact an attorney.