The following is an overview of the basic duties of the Executor (where there is a will) or Administrator (where there is no will) of an estate under the laws of Pennsylvania. The duties of an executor or administrator in other states may vary in some of the details but the fundamental estate administrative steps are in most cases quite similar.
A review of these steps illustrate why an estates attorney should be employed to assist the executor or administrator in this complex, technical and detailed endeavor under the Pennsylvania estate administration law.
In Pennsylvania, where there is a will, it must be submitted to the Register of Wills for probate in the county where the decedent lived at the time of his death. Where there is no will, the next of kin must petition the Register of Wills to be appointed as administrator or administratrix of the estate.
Upon the successful probate of the estate, letters testamentary are granted to the executor or executrix, or letters of administration to the administrator or administratrix, will be granted by the Register of Wills. The grant of letters gives the executor or administrator the official and legal power to act for the estate. The act of probate gives notice to the world of the filing of the will or the commencement of estate administration.
The will and letters testamentary or administration along with any later filed documents (such as the inventory and the Pennsylvania inheritance tax) during the estate administration are open to public inspection by anyone.
Many jurisdictions, like Pennsylvania, require that notices of the commencement of the estate administration be given to beneficiaries. Certification of such notice to the Register of Wills is required.
Additionally, Pennsylvania requires the publication of the grant of letters testamentary and letters of administration.
The executor or administrator needs to discover all assets, re-title them in the estate name and make sure they are secure, protected and insured where required. In addition, assets need to be valued for distribution and tax purposes, so a qualified appraisal is often times required. This process may require significant investigation and attention that usually requires the assistance of an estates attorney.
Estate assets must be transferred to an estate account. The executor or administrator must obtain an Employer Identification Number so an estate account can be established and for the filing of various tax returns for the estate.
The executor needs to provide notice to the IRS of the fiduciary relationship of the executor or administrator or trustee of any trust established pursuant to an estate administration.
The executor needs to pay the various administrative and funeral expenses, and pay just and legal debts of decedent. He needs to retain an estates attorney to assist in determining the validity of such claims and expenses and to determine whether they are reasonable in amount and deductible for estate or income tax purposes.
For more on the determination of payment order of various administrative, funeral, debts and taxes please see Pennsylvania Probate: What Debts Take Priority.
These may include tax returns and taxes due on the following:
1. Form 1040, final lifetime income tax return for the year of death of decedent
2. Form 706 for Federal estate tax return
3. State inheritance tax form for inheritance tax return. For more on the Pennsylvania Inheritance Tax please read Pennsylvania Inheritance Tax: The Basics. To determine who must file such a return please read Pennsylvania Inheritance Tax Return: Who Must File.
4. Form 1041, fiduciary income tax return for estate income during each tax year during the period of administration.
5. Filing an Inventory with the Register of Wills.
An estates attorney is needed to assist in determining the due dates of such returns, the choice of fiscal year of the estate and the various tax elections available to the estate as well as the preparation and completion of all of these returns.
Finally, once all of the above estate administration details have been taken care of and resolved, such as paying all funeral, administration expenses, debts of the estate, filing all required tax returns and receiving settlement and appraisement letters from the various taxing authorities, then distributions to beneficiaries can be made. Under the Pennsylvania estate administration laws, such distributions may require any and all of the following depending on the particular estate administration:
1. Distribution accompanied by and documented by receipts and releases signed by beneficiaries.
2. Formal accounting by the Executor before distributions can be made
3. A family settlement agreement signed by all of the beneficiaries as a requirement before distributions will be made.
The above represents a very general discussion of some of the basic duties of the executor. Remember, the “devil is always in the details,” as there are many technical steps and procedures that need to be taken in addition to the ones listed above. In addition, non-probate assets also may require the attention of the executor.
It is always prudent to retain an experienced probate lawyer to assist in this detailed and technical area of the law.