Detailed Answer
Under Pennsylvania law, a personal representative (formerly known as executor or administrator) must segregate and properly manage estate funds. Opening a dedicated estate account—often called a fiduciary or probate account—is a best practice and, in many counties, a requirement.
Why open an estate account?
- Fiduciary Duty: Pennsylvania law prohibits commingling of estate funds with personal assets. See 20 Pa.C.S. § 3113.
- Transparency: A separate account generates clear bank statements. You can show heirs and the register of wills exactly how funds are handled.
- Reporting: Courts and heirs often require an accounting of estate transactions. A dedicated account simplifies reconciling payments, distributions, and expenses.
- Insurance: Banks offer fiduciary accounts with extended insurance or bonding that protects estate assets.
Statutory Authority: Under 20 Pa.C.S. § 3101 et seq., a personal representative has the power to collect, manage, and distribute estate property. Courts routinely expect fiduciary accounts to ensure those powers are exercised correctly.
Procedure: To open an estate account, the personal representative typically needs:
- Letters Testamentary or Letters of Administration issued by the Register of Wills.
- Employer Identification Number (EIN) from the IRS for the estate.
- Personal identification and the court-issued letters for the bank.
Once open, deposit all incoming funds—sale proceeds, dividends, refunds—into this account. Pay estate debts, taxes, funeral expenses, and distributions from it. Record every transaction and retain bank records for the final estate accounting.
Helpful Hints
- Notify banks that this is a fiduciary account to avoid personal account rules.
- Obtain an EIN—even if the decedent had a Social Security number—to avoid using personal SSNs.
- Keep detailed ledgers or accounting software specific to fiduciary duties.
- Check local Register of Wills requirements; some counties mandate specific forms or reports.
- Consider bonding: the register may require a surety bond unless waived by will or heirs.
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified Pennsylvania attorney to address your unique situation.