Category Archives: Estate Law

What information must a beneficiary provide to the administrator?

Q: I am the named beneficiary and I inherited my friend’s life insurance and 401k. The estate administrator is requesting I provide him with information regarding those accounts/policies so that he can add them to the estate accounting list. Am I required to provide him with that information? (Bethel Park, PA)

A:  If you are listed as a beneficiary, neither asset is considered part of the estate as they pass outside the estate directly to you. The insurance policy is not subject to inheritance tax, but the 401 K may be. If the decedent’s will states that the estate pays inheritance tax on all assets, including those that pass outside the estate, then the attorney may need the information on the 401 K in order to prepare the estate inheritance tax return. If the estate is paying inheritance tax on an asset for which you are beneficiary, that is to your benefit. Therefore, unless the estate is obligated to pay the inheritance tax, I would think the attorney does not need them. These are not required to be listed on the Inventory. Perhaps the attorney just want to confirm exactly what type of asset they are. In my practice, I would rather actually see financial statements for the decedent’s assets than to take an heir’s word that they are not part of the estate and therefore nothing for me to be concerned with.

Can someone change anything on a will that was signed?

Q: My mom’s not going to be here much longer she’s being released to come home under hospice care. I have the will. The house goes to me and my sister but my sister is power of attorney over my mom my mom doesn’t trust her anymore. I my mom able to change anything on the will? (Lawrenceville, PA)

A: To change the content of a will, normally, a new will must be drafted. One cannot simply make changes to a will by writing on it, or crossing things out. Codicil’s (additions or addendums to wills) were used at one time, before the advent of word processing when wills were handwritten or typewritten. Rewriting the entire will to change one thing was unduly time-consuming and burden. However, the legal requirements for a will and a codicil are the same. The codicil must be executed with the same formality as if it was an original will. Thus, in modern times, most people just draft an entire new will. As long as your mother is competent, I would suggest having her make an appointment with a lawyer who can consult with her and draft a legal document that suits her testamentary wishes.

I received 1099-S from the sale of mom’s home. Is this a requiring 1041 filing?

Q: The county valued the house at $131,100 and it sold for $129,900. Doesn’t this count as a loss and therefore not income? (West Mifflin, PA)

A: Form 1099-S is used to report gross proceeds from the sale and exchange of real estate and certain royalty payments. A 1099-S form must be provided to the recipient and a copy mailed or emailed to the IRS. Just as you would list it and attach it to a personal return, you use it on the 1041 Schedule D (decedent’s fiduciary return). You will list the stepped-up value of the house based on what the fair market value was at death. So, if you sell it within in a year of your mother’s death, it is doubtful there will much of a capital gain or loss. There are other factors needed to be known here before I could conclude that the estate will not face a capital gain. It is also relevant as to whether you received the house as a beneficiary, or sold it from the estate as executor. I would suggest that you consult with an estate attorney.

When is it necessary to file an estate when father passes away? Three children are only heirs.

Q: Father passed away 2/22/17 (predeceased by our mother who died in 2002). The only assets would be a 2012 Jeep Patriot with $5,000 still owed, and a home with an $18,000 mortgage balance in a depressed area. There was a $7,000 life insurance policy which went entirely to pay for funeral, with three children also paying about $1,000 each towards funeral. Basically, we already know there are more debts than assets, and are hoping to avoid having to pay estate fees, etc., but we are not sure if an attorney is necessary or what we are required to do. (McKeesport, PA)

A: You would need to open an estate if you want to transact his property-sell his house and transfer any other asset in his name. The question you are facing is, is it worth the time and expense to do this, given the fact that it looks at this point to be an insolvent estate? I would need to know more of the details to properly advise you. However, I have advised clients over the years to walk away from situations like this. The home will just go to Sheriff’s sale. There is a chance that the taxing bodies-school and borough especially, could sue for a deficiency judgment in the tax sale. Although it is rare, I have seen that happen. I would gather all your information-statements, bills, the deed, the mortgage documents and consult with a local attorney.

What happens when one heir is bequeathed the title of a house and another heir an equity stake?

Q: My grandmother recently passed away. My grandfather passed away a few years ago and my mother, also the executor of her will, is her only child and has always lived with my grandmother in her house. In her final will my grandmother left my mother the title to the house with a 40% equity stake bequeathed to me. If my mother has zero intention of selling the house (which is paid in full), does she have to “buy me out” of the 40%? How exactly does this play out? I know that my mother inherited more than enough to cover my portion from my grandmother’s retirement accounts but she is so absolutely outraged that she wasn’t left the house 100% that she won’t include me or inform me of anything that’s going on with the estate/probate process. The estate lawyer never returns my phone calls either. I can only seem to find information when inherited houses are split equally among heirs. (Pittsburgh, PA)

A:  As mentioned, you need your own lawyer to look at the deed and the will. If the estate lawyer will not give you a copy, you can get a copy of the deed in Department of Real Estate in the County Office Building and a copy of the will, assuming it has been filed, in the Register of Wills which is in the City-County Building. Both are in downtown Pittsburgh. Based on what your limited information, it sounds like there will be a deed coming from the estate to your mom and you, 60% to her, 40% to you. I will assume the new deed will list both of you as tenants in common. Yes, unless the will directs otherwise, for example, a life estate to your mother, then you have a divisible interest in the house and can therefore try to force her to buy you out. If she will not agree to a buy out, you can file a partition action which is expensive and time consuming and should be a last resort. I think you need a lawyer as there may be other options. For example, she can grant a deed to you reserving for herself a life estate. This would allow her to live in the house until she is no longer able to or dies, then full title would pass to you. More information is needed to fully advise, but you should seek a legal opinion.

Can a child opt out of their parents will?

Q: Once said parents are deceased, can a child decide not to be included in the will? (Baden, PA)

A: Parents are free to include whoever they wish in their will. Once a will is probated, an heir named in the will, can choose to file a document called a “Disclaimer” in the court where the will was filed. A Disclaimer will in effect, take the heir out of the estate. This should be done with advice of counsel as PA’s disclaimer rule requires that the disclaimed inheritance pass to the next of kin in accordance with the intestate succession statute of the PA Probate and Fiduciaries Code.

Can an officer from a different township pull me over?

Q: I got pulled over and got a citation for that township police department but the officer was from a different township. (Canonsburg, PA)

A: There is a PA statute that allows an officer to leave his jurisdiction and follow (pursue) a vehicle if he suspects a crime or motor vehicle offense is being committed. You might find it in Section 6342 of the PA Motor Vehicle Code in Title 75. So, if you are cruising through township A and blow a stop sign, a police officer can follow you into township B and stop you and cite you. If you are saying that the officer from township A handed you a ticket identifying himself as a township B officer, that is weird. Are you sure he doesn’t work for both townships which is not uncommon in smaller communities that have part-time officers?

What is part of the estate to pay bills after parent is deceased and what can’t debtors touch?

Q: My mother passed and my sister is the executor. There was an IRA that was split between us. I gave my half to my sister to pay debts and taxes. The total in debts that I know of are close to what was in the IRA after taxes were paid. There later was revealed a pension that was left to only me. If the total debts exceed what was in the IRA does the pension that was left to me then become part of the estate to pay these debts or would tangible items then need to be sold off by the estate to pay these additional debts? (Greentree)

A:  I do hope you have an attorney to guide you through this. Generally, assets such as IRA’s, pension plans, insurance policies, and annuities with living beneficiaries are not considered to be part of the estate. They are often termed “non-estate” or “non-probate” assets. Only assets held in the name of the decedent only, comprise estate or probate assets. A creditor to whom money is owed can file a claim against estate assets once an estate is opened. However, such creditor generally cannot reach these non-probate assets. I would need to know what other estates and debts exist to advise if it is warranted to even open an estate. If an estate is opened and insufficient estate assets exist to pay estate expenses and debts, the estate is considered to be insolvent and creditors would be paid so many cents on the dollar. In that case, the estate may need to be closed by the filing of a First and Final Account. Bear in mind, you and your sister will need to pay inheritance tax regardless if an estate is opened or not. You really need to sit down with an attorney and have him or her look at all assets, debts and expenses before an informed opinion can be given.

Why am I receiving funds from my mother’s life insurance when my sister should get everything?

Q: My sister is the executor and per the will she is to receive everything yet my name is listed as a 50-50 beneficiary on her retirement and life insurance. Debt on estate is about 100k. There is 160k in IRA account which I signed over my half to my sister. There is10k in life insurance of which I was sent 5k. My sister is asking for $1500 of that for funeral expenses. We are a month and a half into this and now there apparently was another retirement account that I am listed as the sole beneficiary of $37k. Why am I receiving these funds and why aren’t they going to the estate and then my sister as heir? Below is the distribution part of the will. A) I give such items of my tangible personal property as are designated in a separate writing signed by me which refers to this will to the individual (s) named therein who survive me. B) I give the balance of my tangible personal property (or all such tangible property if no writing exists) to my daughter (my sister) if she survives me. If my daughter fails to survive me I give the balance of my tangible personal property to my son (me), if he survives me. (Glenshaw, PA)

A: Normally, if an attorney was handling this estate, your questions would be answered. Generally, some assets such as insurance policies, IRA’s, annuities, etc., have beneficiaries. Upon the death of the owner, the asset passes directly to the named beneficiary. The asset does not go into nor is it part of the estate. These types of assets are considered “non-probate”, as opposed to probate. An example of a “probate” asset would be something held in the decedent’s name at death, with no listed beneficiary. For example, a house with the decedent named on the deed. A car with the decedent named on the title. Beware, you may owe inheritance tax on some of these “non-probate” assets that you are inheriting. If you don’t have an attorney, and your sister is the brains behind this, I strongly suggest that you hire one.

What can bank do to vehicle or estate if auto loan in mom’s name?

Q: My mother passed and my auto loan is in her name. I cannot finance the vehicle myself as there are too many miles and it is way upside down. I have kept current with the payments so far. The only funds from the estate were in a retirement account and insurance. There is a house which my sister has always lived with my mother but it still has a mortgage. She is also executor. Her plan is to pay off the house with the retirement money and sell it. Can the bank repossess the vehicle? Can they go after either of us or the estate to recoup the balance? What if I turn the vehicle in to the bank? I will receive enough insurance to pay the car off. However, I don’t want to spend 10k on a car worth 3k if I don’t have to but I don’t want the estate to have to pay for the balance of it either.

A: Good question.  If the car is titled in mom’s name, as is the loan, it could be repossessed if they will not refinance you. It would be considered an estate debt. If the car is in your name, but the loan is in mother’s name, that would be unusual. Voluntary relinquishment of a vehicle to avoid repossession may be an option. You can call the lender and ask. As far as the mortgage on the house and your sister’s plans to pay it off with estate money, more information is needed to be known if that is a viable alternative. You should review the estate with an attorney to determine the extent of the debts, expenses, amount of assets, and potential inheritance tax and income tax, just to mention a few.