Estate Settlement / Probate / PA Inheritance Taxes

Is estate administration necessary?

When a loved one dies, a whole new set of issues arise.  Is it necessary to probate his or her will?  What if he or she had no will?  Who has authority to sell his or her property?  The questions sometimes seem endless.  One thing is for sure, distributing assets to heirs is only one small part of the probate and estate administration process. Many other issues are involved in the process of settling a loved one’s estate.

Where to Start

Estate administration begins in the county where the decedent resided at the time of death (the decedent’s primary residence or domicile). 

Probate and estate administration procedures differ from state to state and even from county to county.  Understanding the facets of the legal process in the specific county wherein the estate lies is necessary to ensuring that the process is completed timely, efficiently and legally.

What is Probate?

In Pennsylvania, the probate process essentially marks the beginning of the estate administration process.  Probate involves presenting the necessary information to the offices of the Register of Wills in order to prove the decedent’s death, have the decedent’s will proven valid and appoint the personal representative/executor of the estate.

Estate Administration

The estate administration process begins once the county Register of Wills office has verified the will (if there is a will) and has granted the personal representative the authority to settle the estate.  Estate administration involves taking an inventory of all the decedent’s assets, notifying creditors of the decedent’s death (including publication notices), paying all valid claims/debts against the estate, filing and paying applicable taxes, distributing assets to beneficiaries, and closing the estate.

PA Inheritance Taxes

In general, the Commonwealth of Pennsylvania imposes an inheritance tax on the value of assets transferred upon the death of a person.  The inheritance tax is often imposed on assets that do not pass under a will.  Nevertheless, there are a number of exempt transactions, including transfers between spouses and life insurance proceeds, to name but a few.  The rates vary between 4.5% for lineal descendents to 15% for unrelated parties.  With minor exceptions, an attorney is in the best position to file an inheritance tax return and take advantage of numerous deductions and thus minimize the tax liability.

Federal Estate Taxes

Until January 1, 2010 the federal government has imposed an estate tax on relatively large estates.  In the calendar year 2010 there is no federal estate tax.  However, virtually every tax expert and experienced estate planner believes the federal estate tax will return beginning January 1, 2011.   The principal questions involve the tax rates and the threshold exemption. In 2009 no tax was imposed on an estate under 3.5 million dollars.   If you have a large estate you definitely need to have your estate planning reviewed near the end of 2010.  It is possible the threshold exemption will be reduced to 1 million dollars although at this time it is only speculation.

We welcome the opportunity to assist with the administration of a decedent’s estate.

Contact Us Today

If you would like to speak with our law firm regarding a legal matter you have, we encourage you to contact us by phone at (717) 238-0434 or send us a message.

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