If the estate is too large to qualify for simplified probate, you’ll need to conduct a formal probate proceeding. This is a court-supervised process and is considered a “cleansing of the assets” before they can be distributed to the beneficiaries. This begins when the executor named in the will files the will with the Register of Wills in the county in which the deceased person lived. If there is no will, the surviving spouse or an adult child usually steps forward to serve as the administrator of the estate. (The term “personal representative” is often used to mean either executor or administrator.)
The personal representative also files a document called a petition for probate, asking the local probate court (“orphans’ court”) to open a probate case. Courts in many counties make all the required forms available online, where you can fill them in and then print them. There is a filing fee that may be several hundred dollars; the greater the value of the estate, the larger the fee.
The court issues “Letters Testamentary” to the executor or, if there is no will, “Letters of Administration” to the administrator. This document gives the personal representative authority to gather the estate assets and begin acting on behalf of the estate.
Many Pennsylvania wills are “self-proving”–that is, they are accompanied by sworn, notarized statements signed by the witnesses who watched the deceased person sign the will. If the will isn’t self-proving, then to prove that the will is valid, the personal representative will have to get sworn statements from the witnesses and file them with the court.
The personal representative must then give notice to heirs, beneficiaries, creditors, and the public that the probate is beginning. This is accomplished by publishing a legal notice in two local newspapers.
The personal representative gathers and inventories estate assets, and pays debts and taxes. The personal representative may also need to sell estate property during the probate process. Most transactions don’t need prior approval from the court, though the personal representative must periodically file status reports with the court.
Pennsylvania imposes an inheritance tax, which is due when anyone but the surviving spouse or a charity inherits from the deceased person. Some personal representatives pay the estimated amount of inheritance tax within three months after the death. It’s not due until nine months after the death, but paying early gives the estate a five percent discount off the tax bill.
Pennsylvania does not impose its own estate tax. If the estate is very large—for deaths in 2013, more than $5.25 million—federal estate tax may be due. But more than 99.7% of estates do not owe federal estate tax.
Finally, when taxes and debts have been paid, the personal representative will be ready to distribute what’s left to the people who inherit it. The personal representative must prepare a final accounting, showing what the estate contained, how the assets have been managed, and the plan for distributing them to beneficiaries. It’s common for the beneficiaries to approve the accounting by signing a document called a family settlement agreement. But a personal representative who thinks that creditors might come up with claims later might choose to also file the formal accounting with the court; if approved, this will cut off the rights of third parties to make a claim from the estate. The court may require that its own form be used for the accounting. It is always advisable to contact a qualified attorney to guide you through the Probate process.
Probate is the legal process of presenting your Will to the Court after your death to authenticate it and appoint your Executor. Your Executor must be appointed by the Court in order to collect and distribute your assets as stated in your Will. However, because it is a legal process, there are many steps that must be followed before your Executor can be appointed.
Your Executor will have to submit a petition, a death certificate filing fees, and affidavits from the individuals who witnessed your Will unless your Will is self-proving. A self-proving Will includes affidavits of the testator and witnesses. Upon receipt of all of the appropriate information, the Court will appoint the Executor.
After your Executor is appointed, estate administration begins. Your Executor advertises the opening of the probate in the newspaper. This process begins a one (1) year time frame wherein creditors of the estate can make a claim against the estate. Once the one (1) year time frame has passed, creditors cannot thereafter make a valid claim and their claims are effectively dismissed. Your executor and the attorney for the estate administer the debts of the estate and distribute the assets to your beneficiaries.
If you die without a will, the process is similar, but the state decides who gets your assets, not you. Unfortunately, probate is unpredictable. That’s why many people chose to avoid it, but if all of your heirs agree and your assets are centralized, it can go smoothly.
If your estate is worth less than $50,000 and you do not own real estate, you can seek direct court approval from the Orphans Court to have your assets distributed directly to your heirs. Although this is a more simple, lower-cost process, creditors of the estate must be paid before assets are distributed to the beneficiaries, including Pennsylvania Inheritance tax, which is due within nine (9) months of death.