When someone passes away, Pennsylvania law requires a systematic process to settle debts, taxes, and administrative costs before heirs receive any inheritance. This article explains the key procedures under Pennsylvania’s Probate, Estates, and Fiduciaries Code (Title 20 Pa.C.S.) that ensure estate expenses and creditor claims are properly handled.
Detailed Answer
1. Opening the Estate and Granting Letters
The personal representative (also called executor or administrator) must file a petition for grant of letters with the Orphans’ Court in the county where the decedent lived. Once approved, the court issues Letters Testamentary or Letters of Administration, which legally empower the representative to act on behalf of the estate.
2. Notifying Creditors
Within one month of receiving letters, the representative must publish a notice to creditors in a local newspaper. This notice informs potential claimants to present their claims. See 20 Pa.C.S. § 3172.
3. Presenting and Proving Claims
Creditors have four months from the date letters are granted to file a written statement of claim. The representative reviews each claim and may object if it appears invalid. Valid claims include funeral expenses, medical bills, taxes, and secured/unsecured debts.
4. Inventory, Appraisement and Accounting
The representative must prepare an inventory and appraisement of all estate assets, then file it with the court. After paying approved creditor claims and administrative expenses, the representative files a final accounting for court approval. This ensures transparency and court oversight before distribution.
5. Paying Estate Expenses and Claims
Under Pennsylvania law, estates pay expenses in this order:
- Funeral and administrative expenses
- Secured creditor claims
- Unsecured creditor claims
- Taxes (inheritance, estate tax, income tax)
6. Distributing Remaining Assets
Once all claims and expenses are paid and the accounting is approved, the representative obtains an order for distribution. The court then authorizes the transfer of remaining assets to heirs or beneficiaries according to the will or Pennsylvania’s intestacy rules (20 Pa.C.S. § 3381).
Helpful Hints
- Keep detailed records of all notices, claims, and payments.
- Work closely with an accountant to handle tax filings accurately.
- File timely inventories and accountings to avoid surcharge or delay.
- Respond to creditor objections promptly to prevent litigation.
- Consult the Orphans’ Court Rules of your county for local procedural requirements.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Always consult a qualified attorney for guidance tailored to your situation.