Advice For the Unexpected Executor
Suppose you were appointed the Executor of Aunt Mary’s estate. She lived alone, shared no financial information, enjoyed your visits and regarded you as her favorite nephew. On her passing you learn now that she honored you by naming you Executor in her Will.
At this point you do not know where anything is other than her house in Chester County. The house contains stacks of unsorted papers and bills scattered throughout. All you have now is her Will – hopefully the original since filing a copy is difficult. What would you do?
This scenario is not as uncommon as it might seem. Here are some suggestions.
- Begin by locating as much information in the residence as possible. Your initial job is as detective. You want to discover as much information as possible from inside the house. If there are cancelled checks, they belong to a bank account. Which bank and where did she do her banking? If there are income tax returns, the file could contain, among other things, 1099-DIV’s for dividends or 1099-INT’s for interest.
These can provide clues regarding whether the assets that remain are worth claiming. If there are unpaid bills, they are associated with accounts. Where? How much is owed?
In this process at some point you will likely encounter another issue. You can only go so far on your own. Eventually, you will need to decide whether and when to probate the Will. Probating the Will means presenting it to the Register of Wills and being sworn in as Executor. When that happens you assume responsibility for locating the assets, paying the bills of your aunt and of the estate including taxes, and distributing to beneficiaries who may include you.
- Know what could go wrong and be prepared for it. If, for instance, the house does not sell or, worse, if the remaining mortgage balance on the house is higher that its current value, or your Aunt’s bills exceeded her assets, the Executor can have a real headache to confront. There still are answers. Executors need to know what to do when there is not enough to go around for all of the creditors and beneficiaries.
- Do you have to probate the Will? Suppose, after review of the assets, including the house, and debts, including the mortgage, the Executor discovers that there is negative equity with no offsetting assets to make up the difference. The question could arise and I have, in fact, been asked, whether the Executor is legally required to probate a Will. There is no legal requirement to probate a Will. On the other hand, among the first fees that need to be paid from the estate are expenses of administration including the executor’s fee.
- Does everything pass by Will? Not all assets pass by Will and some assets can, by law, be released without a Will. For instance a bank account in your aunt’s name that holds $10,000 or less can be released by showing a death certificate and the Will without actually probating the Will. Under the Pennsylvania Motor Vehicle Code, a car can be transferred without probate. Jointly titled property as joint tenants with right of survivorship, transfer on death (TOD) accounts, life insurance and retirement funds including IRA’s where there are individual beneficiaries pass without probate. Most assets other than life insurance are still subject to inheritance tax even if there is no probate. Seek help if you do not know.
When the Estate Is Insolvent, What Are the Executor’s Responsibilities? If there is not enough money in the estate to pay the bills, Pennsylvania has an order of priority. Under 20 Pa.CSA Section 3392, the order of payment is (1) costs of administration; (2) the family exemption if a family member lived with a decedent at the time of death; (3) the cost of the decedent’s funeral and burial and of medicines and medical, nursing and hospital services provided within six months of death including costs paid by Medicaid during that time; (4) cost of a gravemarker, (5) rent for occupancy of the decedent’s residence for six months prior to death; (5.1) claims by the Commonwealth and political subdivisions of the Commonwealth and (6) all other claims.
If you have questions, seek help. Resolving an estate, especially with insufficient information, can be a challenge.
About the Author Janet Colliton
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.