TRUST & ESTATE ADMINISTRATION QUESTIONS & ANSWERS

Were you named executor of a will or trustee of a trust? Where do you begin?

Dealing with the loss of a loved one is difficult enough, but being faced with the duties and responsibilities of administering a loved one’s estate can be overwhelming and confusing to most people who are faced with it for the first time.

Our team is ready to serve clients by working closely with the family and being involved with the administration tasks to alleviate the burden on the family.

What is Probate?

Probate is the process by which the person named as executor of a decedent’s Will submits the original Will (along with a death certificate and petition) to the Register of Wills for his/her appointment as executor of decedent’s estate. If the will has been duly witnessed and notarized, the Register of Wills will issue Letters Testamentary to the named executor.

What is Intestacy?

Intestacy is death without a will and can also occur when a decedent has not fully disposed of his or her assets by a Will or other beneficiary designation. In these instances, the decedent’s property will not pass under a will and instead will pass under Pennsylvania’s Intestate Succession Act. The person appointed by the Register of Wills to handle the estate of an intestate decedent will receive Letters of Administration and is referred to as the administrator rather than as the executor.

How long will the administration take?

The length of administration depends upon the involvement and cooperation of the client. If information is exchanged in a timely and accurate manner, the administration process is much more efficient. The length of the administration process also depends upon the complexity of the estate. Given these factors, the average estate or trust administration takes approximately nine months to complete.

Duties of Executor/Trustee:

What responsibilities have you assumed as a result of your appointment as executor or trustee?

The following is a general listing of your duties as executor or trustee:

Notify all interested parties; prepare and file annual status reports; maintain accurate records of assets, income, debts and expenses; locate and value the assets; pay expenses, taxes (including property, income, inheritance and/or estate taxes) and debts; prepare and file the Pennsylvania inheritance tax return and/or federal estate tax return; liquidate assets for distribution.

Pennsylvania Inheritance Tax:

The Pennsylvania inheritance tax return and payment of tax are due nine months from the date of death. A discount of 5% may be taken if a prepayment is made within three months of the date of death. In general, Pennsylvania inheritance tax is payable on all assets except for life insurance. Currently the inheritance tax rates are as follows: 0% to surviving spouse; 4.5% to lineal heirs (children, grandchildren, parents); 12% to siblings; 15% to non relatives.

Pennsylvania Estate Tax:

The Pennsylvania estate tax is in addition to the inheritance tax and applies only when there is a federal estate. The Pennsylvania estate tax is equal to the difference between the federal credit for state death taxes and inheritance tax actually paid. Payment of the estate tax is due within nine months of the date of death.

Federal Estate Tax:

Currently, a federal estate tax return must be filed on all lifetime and death transfers in excess of $3,500.000. The federal estate tax return and payment of tax are due nine months from the decedent’s date of death. No discount for prepayment is available on the federal estate tax.

Income Taxes:

The executor or trustee is responsible for filing the decedent’s final income tax returns for the period of January 1 of the year decedent died to the date of death. The executor or trustee is also responsible for filing the fiduciary income tax returns for the estate and/or trust for each year the estate and/or trust is active.

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