Once all assets are valued, an estate tax return is filed with the Pennsylvania Department of Revenue. The declaration indicates the gross value of the total assets of the estate and all the costs of the estate. This results in a calculation of the net worth of the estate. For example, if the property has a gross value of $200,000 and the expenses and costs are $40,000, the net worth is $160,000. The net worth of the estate is taxed. There is no inheritance tax when transferring property to a surviving spouse. Property transferred to the children or grandchildren of the deceased person is taxed at 4.5%. If the assets are transferred to the deceased‘s siblings, the tax rate is 12%. For all other types of beneficiaries, including friends, neighbors, nieces, nephews and distant cousins, the tax rate is 15%. There is no tax on assets transferred to eligible not-for-profit organizations. In Pennsylvania, you can apply for summary probate if estates are worth less than $50,000 (excluding eligible funeral expenses, real estate, and family payments). There is no affidavit procedure in AP. Some people want to know in advance what the fees will be, without the variability that comes with billing after the time has passed.
For these customers, we are willing to offer a fixed fee that will be charged during the order when it is won. Fixed fees are based on our estimate of what is needed to pay the estate, and for this reason (especially for large estates) they are generally favorably comparable to collecting a percentage. After the death, the first judicial investigation concerns assets in the name of the deceased, such as real estate, shares, bank accounts, vehicles and pensions. It is also necessary to identify what the deceased person owes, including mortgages, loans, fee accounts, and medical expenses. In Pennsylvania, it can take up to a year to settle an average estate. Keep in mind that more complex or larger discounts may take longer. Determining executorship commissions and attorneys‘ fees based on the size of the estate is certainly easier than considering a variety of factors in all cases, especially for relatively common estate administrations and for estates where no objections are raised to the commissions and fees charged. The percentage method therefore appeals to orphan court judges, although the Pennsylvania Superior Court has practice in expert opinions at Sonovick Estate, 373 Pa. Super 396 (1988) and Preston Estate, 560 A.2d 160 (1989).
Martin Law Firm‘s estate lawyers regularly represent personal representatives in probate cases. We handle cases in the Register of Wills and Orphan Courts in Montgomery, Philadelphia, Bucks, Delaware and Chester Counties. If you have been appointed as the personal representative of an estate in a person‘s will, please contact us today at 215–646-3980. If things go well in compiling financial information and determining the expenses of an estate, an inheritance tax return can be filed within five to nine months of the death. Pennsylvania requires that the tax return be filed and that inheritance tax be paid within nine months, unless an extension is granted. A Pennsylvania judge issued a notice to which he attached a list of the percentages he used for his own counsel in auditing estate accounts, and several other judges have since written opinions showing that they also use this calendar. Although this appendix (reproduced below) best reflects the views of some judges in some estates, it nevertheless provides guidance on determining the appropriateness of administrative costs in other estates. After the Register of Wills has issued letters of will to the personal representative, the personal representative is now responsible for the administration of the estate. Here is an overview of the duties of the personal representative: Estate lawyers are entitled to “reasonable remuneration” for their services. Estate attorneys typically charge an hourly rate, or they charge a percentage fee based on the value of the estate and the types of assets in the estate. For hourly services, lawyers often require an upfront payment to cover some or all of the scheduled fees.
The lawyer usually sends the personal representative a monthly invoice detailing the work done, the time spent and the fees for that month. If we were to calculate using the Johnson Estate model, the heirs to the $2.3 million estate would pay $36,500 more in fees ($58,250 minus $21,759) than the heirs to the $600,000 estate for probably the same amount of work. These are just some of the many tasks and responsibilities of a personal representative. Many estates have unique problems and the personal representative is responsible for managing or solving all tasks and situations that may arise. Serving as the executor of an estate in Pennsylvania is a difficult and time-consuming task. In addition to the emotional force required, the executor must be able to quickly digest many laws and responsibilities enforced by various bureaucracies and institutions. This is a monumental task in a foreign field. Fortunately, there is help.
Executor – Read this before hiring a lawyer. There are several ways in which lawyers incriminate executors and estates. But before you hire one, read this article in order to understand what‘s best for you and your particular property. Never hire a lawyer without a written fee agreement documenting the fee method, regardless of the method you use to calculate the fee. Many GPs charge discounts based on a 5% to 6% flat rate. However, in many cases, especially for large and medium estates, this fee structure is excessive and even exceeds the fee policies listed below. Others charge a flat fee based on Johnson Estate guidelines. The guidelines are set out below so that you can make an informed judgment about fixed costs.
Many large firms and lawyers experienced in estate planning and estate charge an hourly fee. Many customers prefer this approach. However, this has an element of unpredictability that executors may not like. At the very least, if you are an executor, you should in good faith request an estimate of these fees and be billed regularly and notified as soon as possible if the fees exceed that estimate. In many cases, the best fee structure from an executor and estate perspective is the negotiated package. This is the method I use in my business mainly because it is customer-oriented. Customers want to know that the fees are fixed and reflect the work they will be doing. Clients can also assess whether the fees are reasonable or not given the division of labour between the law firm, executor and family, accountants or others. As a consumer, it is best for a lawyer to check the facts of your particular estate and then provide a fixed fee based primarily on the work to be done by the firm. Finally, under Pennsylvania law, attorneys‘ fees for estates are not set by law, but are subject to review.