Estate administration involves distributing the property that belongs to a person who has recently died. Typically, the personal representative of an estate notifies the probate court of an individual’s passing and submits the will or other estate planning documents that they located after the decedent passed.
If an individual dies without an estate plan, then their immediate family members are their heirs who have a right to inherit their resources in accordance with the law of intestacy. Otherwise, the people who inherit from an estate are the beneficiaries named in the estate plan. Before those people receive their share of the estate, the personal representative must handle any remaining financial obligations owed by the decedent.
What obligations are a top priority during estate administration?
The probate courts
Pennsylvania statutes designate claims due to the United States (think Federal income taxes) as the top priority financial obligation for the estate. Next are probate expenses and other estate administration costs. The courts and even the attorney representing the personal representative have the strongest right to estate resources.
Medical creditors
The state also recognizes the importance of paying for the medical support provided to an individual in their last days. End-of-life care received within six (6) months of the date of death, ranging from emergency medical services to final invoices from nursing home facilities, is a priority during estate administration. The estate must also prioritize funeral and burial expenses, and the cost of a grave marker.
Landlords
If the decedent rented their home, their rent from their last six months of life may be a priority debt to cover. If they fell behind on their rent due to illness, their estate may need to cover their past-due rent before funds go toward other obligations.
Any creditors with valid claims
With exceptions for the minimum amount of support allocated for dependent family members, any valid creditor claim generally takes priority over the rights of beneficiaries and heirs to receive property from the estate. Personal representatives need to ensure that they thoroughly review correspondence and financial records to fulfill the financial obligations of the decedent. A failure to do so could theoretically lead to personal financial responsibility. Creditors and tax authorities could take legal action against a personal representative who improperly distributes estate resources.
Properly fulfilling financial obligations is a key component of estate administration. Personal representatives can better protect themselves by ensuring they handle obligations appropriately, and by engaging an experienced estate administration attorney to guide them along the way. Those beneficiaries hoping to inherit from an estate often need to demonstrate patience as the personal representative handles taxes and debts prior to distributing what remains of the estate. If you need assistance with probate and estate administration in Southeastern Pennsylvania, contact an attorney today.