Tag Archives: estate

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.

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.

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.

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.

What legal recourse do I have as Co- Executor with my disagreeable sister?

Q: I live in Pittsburgh and was my dad’s primary caregiver for past 2 years. My sister, who lives across the country, and I are named co-executors and equal 50/50 beneficiaries of the estate. I am anxious to get probate started, will filed and wrapped up as quickly as possible so my wife and I can move on with our life. Two years of caregiving and working full time have me and my wife exhausted. There are No debts or creditors. Cut and dry, but my sister, who has been estranged from our dad for 10 years, is preventing probate from getting started because she doesn’t like the attorney I consulted with (who was very good but did advise us if we wanted the process to go faster and cheaper, because she is out of state she could renounce executorship. Well my sister had a fit and got highly offended refusing to allow us to use that attorney. The two other attorneys I contacted suggested the same. Sister is also disagreeable to how I remove trash that she and I bagged up together from our dad’s home. And she opposed the amount flowers cost at the funeral. I am starting to resent her attitude and how controlling she is trying to be–for no reason as we are both equal heirs.

A: It is more efficient to have a local executor. Your sister doesn’t need to renounce her right to serve as Co-Executor, just because she lives out of town. The attorney may charge more if he must send her copies of everything and get her signatures by mail, but if she understands that, it should not be a problem. If she doesn’t like your attorney, you and she can pick a few local ones, then pull names from a hat. If she is totally disagreeable and continues this course of conduct, you can petition to remove her as Executor through your attorney.

Do we as joint tenants with right of survivorship now owe an inheritance tax/penalty?

Q: My mom is still alive at 83, but 12 years-ago gifted her home to me and my four sisters all individually named on a deed as joint tenants in common with right of survivorship. 10 months-ago one of my sisters passed away. We have been told we now owe an inheritance tax for my sister who passed, portion, plus we had 9 months to have done that, and now owe a penalty for a month as well. We had no idea any of that needed to be done! Is this accurate and how is this inheritance calculated?

A: This sort of thing happens a lot. Somebody was in my office yesterday with the same issue. The four remaining joint tenants will owe inheritance tax on one-fifth of the market value of the home. The value of the home will be based at date of death value of the home at the time your sibling/joint tenant died. Interest begins to accrue on unpaid inheritance at a very small percentage rate after 9 months from the date of death. You can go to the PA Department of Revenue website and calculate interest due on delinquent inheritance tax. I doubt if at only 10 months out, penalties will be incurred. You will need to file an inheritance tax return as soon as possible. More importantly, you should promptly make an estimated payment toward inheritance tax to the Department of Revenue so that interest will stop accruing. This can easily be done by an attorney and I suggest you consult with one.

What happens with his car, if he dies?

Q: What happens to a child’s car if the child dies (it was paid for) and the only name on the title is the child’s? In case something happened to him, what would happen to his car ?

A: If there is a loan on the car, the bank can repossess the car, reclaim it actually. They would sell it and if any money was due your son they would issue a check to either his estate or his next of kin. My experience is that you can probably talk them into issuing a check to the next of kin if you sign some releases. If he owned the car, and therefore there was no lien on it, you can probably get AAA to transfer the title to his next of kin. It will be easier if he has a will which states who inherits from him. That way, you can take a copy of his death certificate and will to AAA and they will be more likely to transfer title. If you think he will die soon, you should hire an attorney to draft a will for him. Good luck!

How can I gain possession of a dead relative’s home.

Q: My uncle who was married died in 1972, his wife died in 2001. No kids. There isn’t a will and I wanted to know if I need a lawyer to go to Probate court.

A: You really need to sit down with a local probate attorney as there are too many issues here. For example, is the house in his or both of their names? Did she have children prior to their marriage. That is major. You may end up inheriting a portion of it with his wife’s heirs if both are on the deed. Much more information is needed as well, for example, is there a mortgage? Are there liens against the property for unpaid municipal services or taxes? Does your uncle have any judgments against him? If any of these problems exist, you would take ownership of the property subject to those liens and unpaid mortgages or taxes. In addition, has inheritance tax been paid? Interest begins to accrue after nine months and penalties can be imposed. You need to proceed with caution and do some research before opening an estate