Losing a parent is undoubtedly a difficult time emotionally. Amidst grieving, there are practical matters that require attention, particularly concerning their estate. If an estate plan was not prepared or the family did not share information with other loves ones, this process to wind up the affairs of a decedent can be more involved. Knowing what steps to take can alleviate stress and ensure that your parent's wishes are honored.
What is Included in the Estate?
The estate typically encompasses all assets, liabilities, and legal obligations left behind by the deceased. This includes:
- Assets: Real estate, investments, bank accounts, vehicles, personal belongings, etc.
- Liabilities: Debts, mortgages, taxes owed, medical bills, utility bills, etc.
- Legal Obligations: Any legal responsibilities or ongoing legal matters.
Understanding the full scope of the estate is crucial for proper administration and distribution.
Who Takes Responsibility of the Estate and Makes Decisions?
Upon the death of a parent, the responsibility for administering the estate falls to the appointed executor or personal representative as designated in the parent's will. If no will exists, state law determines who will act as the administrator. Once appointed by the Register of Wills, the personal representative for the estate, typically with the help of a lawyer, has to fulfill the duties required of the appointment. Responsibilities include:
- Notifying Heirs: Heirs and beneficiaries must be notified; proof of notice must be filed with the Register.
- Gathering Assets: Identifying and securing all assets of the estate.
- Securing and Protecting Assets: Property should be insured, taxes and bills paid, etc.
- Paying Debts and Taxes: Settling any outstanding debts and taxes owed by the deceased. Contested claims may have to be adjudicated by the Orphan’s Court.
- Paying Inheritance Taxes and Filing the Inheritance Tax Return (REV-1500 Form)
- Distributing Assets: Distributing remaining assets to beneficiaries according to the will or state law if there is no will.
- Preparing and Accounting: This can be formal or informal by a family agreement.
Decisions regarding the estate must be made carefully and in accordance with legal requirements to avoid complications or disputes among heirs and creditors. The Commonwealth of Pennsylvania can be a creditor and assert a lien against the estate through the state’s Department of Human Services Estate Recovery Division if the decedent received benefits such as Medicaid long term (nursing home) care or medical assistance during their lifetime prior to their passing.
Insolvent estates are those for which there are insufficient assets to pay all of the debts and administration expenses of an estate; no inheritance taxes need to be paid. Solvent estates where there is money or the value of assets to distribute to heirs after debts and expenses are paid are subject to inheritance tax at different rates depending upon the relationship of the beneficiary to the decedent; assets to spouses are not levied any tax however assets to lineal decedents such as children, grandchildren or parents are assessed at 4.5% taxes whereas to siblings 12% and 15% for all others except charities. Paying taxes within 3 months of decedent’s death saves 5% taxes.
Why It Is Important to Hire an Attorney for Estate Matters
Navigating estate matters can be complex and laden with legal intricacies. Hiring an experienced attorney can provide numerous benefits:
- Legal Expertise: Attorneys focusing in estate law possess the knowledge to navigate probate processes and legal requirements.
- Mitigating Disputes: Professional guidance can help prevent family disputes over the estate, ensuring a smoother administration process.
- Efficiency: Attorneys streamline the estate administration process, reducing the burden on family members during a difficult time.
- Compliance: Ensures compliance with all legal obligations and deadlines, minimizing the risk of legal challenges.
By engaging a skilled attorney, you can gain peace of mind knowing that your parent's estate will be handled competently and in accordance with their wishes.
Contact the Law Offices of Anthony Urban
If you are facing the responsibility of administering a parent's estate or have questions regarding estate planning, contact us today. Our experienced attorneys are here to provide compassionate guidance and expert legal support during this challenging time.