Disclaimer: This article is for informational purposes and is not legal advice.
Detailed Answer
When someone dies in Pennsylvania, their estate must settle debts and fees before distributing assets to heirs. The remaining property forms the residuary estate. To determine what assets remain, follow these steps under Pennsylvania law.
1. Compile a Complete Inventory of Estate Assets
- Real property: homes, land, rental properties.
- Bank accounts: checking, savings, certificates of deposit.
- Investments: stocks, bonds, mutual funds, retirement accounts.
- Personal property: vehicles, jewelry, furniture, art.
- Non-probate assets: joint accounts, life insurance proceeds, payable-on-death accounts (these transfer outside probate).
2. File an Inventory with the Orphans’ Court
Pennsylvania law (20 Pa.C.S. §3303) requires the personal representative to file a detailed inventory listing all assets and their values in the Orphans’ Court within 90 days of appointment.
3. Identify and Pay Estate Debts and Fees
Before distributing assets, pay these obligations:
- Submit creditor claims within six months per 20 Pa.C.S. §3302.
- Cover priority claims first (administration expenses, funeral costs, taxes) under 20 Pa.C.S. §3382.
- Settle unsecured debts and judgments.
- Pay attorney and court fees related to probate.
4. Calculate the Residuary Estate
Subtract total debts and fees from the inventory value. The difference equals the residuary estate. Pennsylvania intestacy rules (20 Pa.C.S. §2101 et seq.) guide distribution when there is no will.
Hypothetical Example
Jane Doe’s estate holds $500,000 in assets. She owes $20,000 in funeral expenses, $10,000 in taxes, $5,000 in unresolved bills, and $15,000 in attorney fees. Total obligations equal $50,000. The residuary estate equals $450,000 available for distribution.
Helpful Hints
- Keep detailed records of all asset valuations and payments.
- Notify creditors promptly to avoid personal liability as personal representative.
- Use a certified appraiser for high-value items to ensure accurate values.
- Consider working with a probate attorney to navigate complex claims and distributions.
- Review life insurance and retirement plan designations that bypass probate.