The Basic Procedure for Opening an Estate
The death of a loved one is always a difficult time for family and friends. Shortly after an individual’s death, the decedent’s family and friends will need to determine how to handle the many issues involved in the administration of the estate. The process of estate administration involves many steps and often takes over a year from start to finish. This article will discuss the initial steps of determining if a probate estate must be opened at the Register of Wills and if so, how to determine who may be sworn in as the estate’s personal representative.
The first step in an estate administration is ascertaining if a personal representative must be appointed by the Register of Wills. To do this, it is necessary to have a general sense of what property the decedent owned at the time of his or her death. Most estates are comprised of probate and nonprobate property. Probate property is any asset the decedent owned in his or her individual name, while nonprobate property is (a) any property the decedent owned jointly with another individual as joint tenants with the right of survivorship or tenants by the entireties, or (b) individually-owned property for which the decedent executed a beneficiary designation (such as life insurance, retirement accounts, or payable on death accounts).
Probate property will pass according to the provisions of the decedent’s Last Will and Testament or the law’s of intestacy (if the decedent died without a Will); as such, the personal representative of the decedent’s estate will have the responsibility and authority to administer this property. Nonprobate property will pass by operation of law to either the surviving joint owner or the named beneficiaries; since this property does not pass according to the Will or intestacy, the personal representative will not be directly responsible for administering the distribution of this property. Therefore, if a decedent’s estate comprises only nonprobate property, it may not be necessary to have a personal representative appointed by the Register of Wills. In contrast, in almost all cases where the decedent owned any probate property, it will be necessary to have a personal representative appointed in order to properly administer this property.
For example, suppose that a Husband and Wife are married for many years and own their house jointly as tenants by the entireties and their bank accounts jointly with right of survivorship. Husband and Wife also have retirement accounts whereby they have named each other as beneficiary. When Husband passes away, his estate contains only nonprobate property that will pass by operation of law to Wife. Wife now has the full legal authority to deal with all of Husband’s property; as such, it is likely not necessary to have a personal representative appointed by the Register of Wills. In contrast, suppose that Husband owned one bank account individually, and did not execute a beneficiary designation for this account. Upon Husband’s death, only the personal representative of Husband’s estate has the authority to administer this account; as such, a personal representative would need to be appointed by the Register of Wills.
It is very important to note that all assets comprising a decedent’s estate, whether probate or nonprobate, factor into many other steps of estate administration. These assets may be subject to creditor claims prior to distribution, and will likely be subject to the Pennsylvania Inheritance Tax, Federal Estate Tax, or both. As such, just because as estate is comprised of only nonprobate assets does not mean that the estate administration process does not need to be completed. It is very important to speak with an attorney knowledgeable in estate administration to determine what steps are necessary for estates comprised of only (or mostly) nonprobate assets.
Once the family and friends of a decedent have determined that a personal representative must be appointed by the Register of Wills, the next step in estate administration is determining who will serve in this very important role. The personal representative assumes a fiduciary duty to administer the decedent’s estate according to the law and is responsible for all aspects of the estate administration, including marshaling the decedent’s probate assets, resolving any creditor claims, preparing and filing any necessary death and income tax returns, and ultimately distributing the estate to the beneficiaries. It is important to note that the personal representative of an estate does not need to be a beneficiary of an estate.
If the decedent executed a Last Will and Testament, the decedent’s estate is considered “testate.” The Will very likely includes the name of the individual or individuals the decedent wished to serve as personal representative (known as the Executor). Often, a Will names a primary Executor and a successor Executor to provide for circumstances where the primary Executor is unable or unwilling to serve. The person named as Executor in a decedent’s Will is under no obligation to accept the role; if he or she does not wish to serve prior to opening the estate, he or she must execute a notarized Renunciation in favor of the next Executor named in the decedent’s Will.
If the decedent did not execute a Will, the process of appointing a personal representative is a little more involved. Individuals who do not execute a Will before their death are considered to die “intestate,” which means that their estate will be distributed according to the state’s intestacy laws (Pennsylvania’s intestacy laws can be found at 20 Pa. C.S. § 2101 et seq.). The intestacy laws also provide a list of who may serve as the personal representative of an intestate estate (known as the Administrator). In Pennsylvania, the Administrator of an estate may be, according to preference: (1) the decedent’s surviving spouse, (2) the decedent’s issue (including children and grandchildren), (3) the decedent’s parents, (4) the decedent’s siblings, (5) the decedent’s grandparents, and (6) other individuals are described in the statute. All individuals in each class have an equal right to serve as Administrator; as such, if anyone in a class does not wish to serve, he or she must execute a notarized Renunciation in favor of someone else.
An example may best illustrate this point. Suppose that Husband and Wife are a married couple with four Children, and Husband dies without a Will. Wife is elderly, and does not feel that she can capably serve as Administrator of the Estate. If Wife does not wish to serve, then all four of Children have an equal right to serve as Administrator. The Oldest Child volunteers to serve as the sole Administrator of the estate. As such, in order for Oldest Child to serve, she must obtain Renunciations from Wife and the three other Children before going to the Register of Wills to be sworn in as the Administrator. This example demonstrates how careful estate planning during life may make the administration of an estate more streamlined following an individual’s death.
Once it has been determined who will serve as the Executor or Administrator of an estate, the proposed personal representative must go to the Register of Wills of the county where the decedent was a resident at death in order to present the Register with all required paperwork and swear an oath to faithfully administer the estate according to the Law. The proposed personal representative must bring a Petition for Grant of Letters Testamentary (for testate estates seeking the appointment of an Executor) or a Petition for Grant of Letters of Administration (for intestate estates seeking the appointment of an Administrator). This Petition includes a general description of the type and value of the decedent’s property, as well as a list of the beneficiaries of the estate. The proposed personal representative must bring an original death certificate in all cases; for testate estates, the proposed Executor must also bring the original Will and any original Codicils. The proposed personal representative must also bring all original notarized Renunciations, if necessary. It may also be necessary for the proposed personal representative to obtain a fiduciary bond if the decedent’s Will did not waive this requirement or if the proposed personal representative is not a resident of the Commonwealth of Pennsylvania. The paperwork will be reviewed by a clerk at the Register of Wills and, if everything is in order, the clerk will administer the oath to the proposed personal representative to open the estate.
As illustrated above, there are many considerations in determining if an estate must be opened at the Register of Wills and who will serve as the estate’s personal representative, depending on the unique facts and circumstances of each individual case. It is therefore recommended that the advice of an attorney knowledgeable in estate administration be sought shortly after an individual’s death to determine the proper manner of proceeding for estate administration.