How Do You Settle A Philadelphia Pa Estate? – Intro
The best way to truly understand what Pa Estate Planning is all about is to first understand the process of Pa Estate Administration (or Pa Estate Settlement), or what happens to a Pa Estate after the owner dies.
Said another way, understanding the process of settling a Pa Estate can help you really wrap your mind around all the different components of a comprehensive Pa Estate Plan.
So – you need to learn one side to learn the other – and vice versa – and so on – and so on …
How Do You Settle A Philadelphia Pa Estate? – Steps
The Pa Estate Settlement process can be long, and it’s often confusing. However, a solid checklist, can show that it’s not as complicated as you first thought. A timeline that details what to expect and when to expect it, you may find it’s actually not as complicated as you first thought.
Especially if you’ve been named as the Pa Executor, you need to understand the estate settling process. This will ensure that the estate is settled properly. This will help to show that all heirs receive their share of the estate. Use the following checklist to feel confident you’ve done everything you need, in this order, to properly settle an estate.
- Organize important information
- Determine need for probate or attorney help
- File the Will and notify necessary persons
- Take inventory and appraise all assets
- Set up a bank account
- Pay taxes
- Pay off any debts
- Distribute assets according to deceased person’s Will
- Close the estate
1. How Do You Settle A Philadelphia Pa Estate? – Information
The first step (and one of the most important ones) in the process of settling an estate is getting organized. You’ll want to keep track of both your expenses and all the time you spend working on settling the estate, as you’re entitled to be compensated.
You should look for a Will. You’ll need access to several certified copies of the death certificate. You must notify financial institutions, including the bank, credit card companies and any investment firms. Be sure to inform the Social Security Administration, and know that you’ll need the deceased’s social security number to do so. Try to find a copy of the most current tax return, a birth certificate and any other important documentation.
There are other, practical things to do, too. If you didn’t live with the deceased and there is now an empty property, you should secure it by changing the locks. You’ll want to take a detailed inventory of all his or her belongings. We’ll go more into detail about this below below, but you’re going to need to open a estate checking account. This will be in the estate’s name – you’ll be paying for things like final bills, court costs, potential lawyer’s fees and more from this account.
Once you have these basic documents and tasks done, you should make one master list of contacts that includes all business associates and colleagues, anyone named in the Will, neighbors, friends, relatives and others.
2. How Do You Settle A Philadelphia Pa Estate? – Probate or Attorney
You may or may not need a lawyer. If an attorney is needed due to dispute, complexity or just for peace of mind, it’s important to remember that the process can become drastically more costly once attorneys are involved. To mitigate some of the cost, some opt to just hire an attorney to coach them along the way.
If the deceased only had a Will, it’s likely the estate will have to go through what’s known as probate. Probate is the court proceeding that validates a Will. Keep in mind, not all Pa Estates will need to go through Pa Probate.
Knowing how to settle an estate without a Will can be confusing, time-consuming and costly. Yet surprisingly, it’s more common than you may think. When it happens, the resolution of the estate will depend on how big it is, how complex it is and how many heirs claim to have rights to a piece of it.
Pa state law comes heavily into play in these cases, and the courts would determine who should be appointed to administer and settle the estate.
It used to be thought that only the very wealthy had what’s known as “an estate,” but the truth is, even if you don’t have a 6 figure savings account or own a mansion, you likely do have an estate you’ll one day leave behind . And when that time comes, whether you’ve prepared for it or not, your estate will need to be settled.
Estate Planning can be complicated or it can be simple. But regardless of how complex an estate is, establishing what happens to it once you pass away is important. When the time comes for it to be settled, you want the process to be as efficient as possible. Trust and Will makes every aspect of Estate Planning — including estate settlement — simple, fast, affordable and easy to understand.
Curious if your Estate is protected? Trust & Will can help! Learn more about what we do and how we can protect your family, assets and legacy.
3. How Do You Settle A Philadelphia Pa Estate? – Notify Necessary Persons
If there is a Will, it must be filed in the Register of Wills. The Beneficiaries need to be notified. If there is a Trust, any successor trustees should also be informed. Other people to notify include: creditors/banks, the post office, the utility companies and any other business the deceased had accounts with.
A smaller detail, but one that will ultimately need to be handled, includes canceling any subscriptions and notifying any agencies that were offering the deceased benefits (i.e. pension plans, etc). The last thing you want to have to be dealing with is returning payments that the estate was not entitled to.
4. How Do You Settle A Philadelphia Pa Estate? – Inventory & Assets
Take inventory of all assets to see what needs to be distributed. You may want to have high value assets appraised. This will determine whether or not the Estate will owe any taxes. Remember that, as executor, it’s your responsibility to take care of the assets.
5. How Do You Settle A Philadelphia Pa Estate? – Estate Bank Account
After you have what’s known as the Letters Testamentary, you’ll want to set up an estate bank account.
Use this account to collect money that may be owed to the deceased person. You can (and should) use this money to pay off any debts, and expenses.
6. How Do You Settle A Philadelphia Pa Estate? – Taxes
File any necessary tax returns and ensure taxes are paid. You may need to file the following:
- Federal Estate Tax (Form 706)
- Pa Inheritance Tax (Form Rev 1500)
- Gift and Generation-Skipping Transfer Tax (Form 709)
- Estate and Income Tax (Form 1041)
- Final Individual Income Taxes (Form 1040)
7. How Do You Settle A Philadelphia Pa Estate? – Debts
Even though the person who borrowed the debt is no longer living, their debts will still need to be paid off.
Luckily, the estate (and not you personally) will pay the debts, so you don’t have to worry about anything other than figuring out what debts are owed to which companies.
Read more about what happens to debt after you die for additional, more detailed information about how to navigate this portion of the estate settlement.
8. How Do You Settle A Philadelphia Pa Estate? – Distribute
After debts and taxes are paid, and if probate is closed (if the estate needed to go through the probate process), then you can distribute assets according to the deceased party’s final wishes.
9. How Do You Settle A Philadelphia Pa Estate? – Close
Once all the above steps have been thoroughly completed, you can finally file a petition for discharge of executor responsibilities and ask the court to formally close the estate.
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John B. Whalen, Jr., JD., LL.M., is an AV Peer Review Rated Preeminent 5.0 and Avvo Rated 10.0 Superb (obtaining over 95 client reviews and peer endorsements) premier and prestigious Attorney and Counselor at Law.
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Mr. Whalen has achieved the AV Peer Review Rated Preeminent award from Martindale, AV Peer Judicial Preeminent award, the Avvo Rated Superb 10.00 award, the Avvo Rated Top Lawyer award, the Clients’ Choice Award, and the Top One Percent (1%) award. He is the recipient of the Legum Magister Post-Doctorate Degree (LL.M.) in Taxation (from the Villanova University School of Law), a recipient of the American Jurisprudence Award in Wills, Trusts, and Estates (from the Widener University School of Law), and a recipient of the ABA-BNA Law Award for Academic Excellence (from the Widener University School of Law).