If you need to shepherd an estate through probate in Pennsylvania, you'll probably get good help from the local court, including downloadable court forms. But be prepared; the process can take a while, and you'll need to make regular reports to the court. Fortunately, many assets can be transferred to the people who inherit them without probate.
Assets That Can Skip Probate
Generally, only assets that the deceased person owned in his or her name alone go through probate. Everything else can probably be transferred to its new owner without probate court approval.
The most common kinds of nonprobate property are:
- Property the deceased person owned in joint tenancy with another person—for example, a house or bank account owned by the deceased person and his spouse
- Assets for which the person designated a beneficiary—for example, a payable-on-death (POD) bank account, a retirement plan account, or life insurance policy
- Assets the deceased person held in a living trust
Small amounts of cash can also go to the surviving spouse (or, if there is no surviving spouse, to the children or more distant relatives) without probate, in certain situations:
Money in bank accounts. Financial institutions may release up to $3,500 to the surviving spouse without probate court authorization. All the surviving spouse must do is show the bank a certified copy of the death certificate and proof that funeral expenses have been paid. (20 Pa. Cons. Stat. Ann. § 3101.)
Wages. Employers may pay up to $3,500 in wages, salary, or other compensation to the employee's surviving spouse. Probate court approval is not necessary. (20 Pa. Cons. Stat. Ann. § 3101.)
Life insurance payable to the estate. If an insurance company owes the deceased person's estate up to $11,000 in life insurance benefits, and the personal representative of the estate doesn’t claim it within 60 days after the death, the company may pay the money to the surviving spouse without probate court approval. (20 Pa. Cons. Stat. Ann. § 3101.)
Simplified Probate for Small Estates
Not all estates must go through a long and expensive probate process. Pennsylvania offers a simplified probate process for small estates, which state law defines as estates that contain no more than $25,000 in assets. That total does not include real estate, certain amounts the family can collect without probate, and amounts used to pay funeral expenses. (20 Pa. Cons. Stat. Ann. § 3102.)
To begin the small estate process, the executor of the estate files a written request with the local probate court, asking to use the simplified procedure. The court may permit the executor to distribute the deceased person’s assets without going through all the parts of regular probate.
Regular Pennsylvania Probate
If the estate is too large to qualify for simplified probate, you’ll need to conduct a formal probate proceeding. This begins when the executor named in the will files the will with the Register of Wills in the county in which the deceased person lived. If there is no will, the surviving spouse or an adult child usually steps forward to serve as the administrator of the estate. (The term “personal representative” is often used to mean either executor or administrator.)
The personal representative also files a document called a petition for probate, asking the local probate court (“orphans’ court”) to open a probate case. Courts in many counties make all the required forms available online, where you can fill them in and then print them. There is a filing fee that may be several hundred dollars; the greater the value of the estate, the larger the fee.
The court issues “Letters Testamentary” to the executor or, if there is no will, “Letters of Administration” to the administrator. This document gives the personal representative authority to gather the estate assets and begin acting on behalf of the estate.
Many Pennsylvania wills are “self-proving”–that is, they are accompanied by sworn, notarized statements signed by the witnesses who watched the deceased person sign the will. If the will isn’t self-proving, then to prove that the will is valid, the personal representative will have to get sworn statements from the witnesses and file them with the court.
The personal representative must then give notice to heirs, beneficiaries, creditors, and the public that the probate is beginning. This is accomplished by publishing a legal notice in two local newspapers.
The personal representative gathers and inventories estate assets, and pays debts and taxes. The personal representative may also need to sell estate property during the probate process. Most transactions don’t need prior approval from the court, though the personal representative must periodically file status reports with the court.
Pennsylvania imposes an inheritance tax, which is due when anyone but the surviving spouse or a charity inherits from the deceased person. Some personal representatives pay the estimated amount of inheritance tax within three months after the death. It’s not due until nine months after the death, but paying early gives the estate a five percent discount off the tax bill.
Pennsylvania does not impose its own estate tax. If the estate is very large—for deaths in 2013, more than $5.25 million—federal estate tax may be due. But more than 99.7% of estates do not owe federal estate tax.
Finally, when taxes and debts have been paid, the personal representative will be ready to distribute what’s left to the people who inherit it. The personal representative must prepare a final accounting, showing what the estate contained, how the assets have been managed, and the plan for distributing them to beneficiaries. It’s common for the beneficiaries to approve the accounting by signing a document called a family settlement agreement. But a personal representative who thinks that creditors might come up with claims later might choose to also file the formal accounting with the court; if approved, this will cut off the rights of third parties to make a claim from the estate. The court may require that its own form be used for the accounting.