Common Mistakes in Pennsylvania Estate Matters
This legal malpractice avoidance tip is short and simple. It covers three common mistakes that you can easily avoid in estate related matters. Sometimes all you need is a reminder.
- The Statute of Limitations for Will Contests is One Year
If you’re hired to contest a will which has already been probated, you have one (1) year to appeal the Register’s decree. 20 Pa.C.S.A. § 908. Don’t miss this deadline.
Keep in mind that the Court, upon petition of a party, may limit the time for appeal to three (3) months.
If your client had a meritorious claim, you may be liable to the client for the value of that lost claim.
- Determine Whether the Estate has any Secured Creditors
If you find yourself representing the personal representative of an insolvent estate, take the time to determine whether any of the estate’s creditors are secured. If so, the personal representative will not be able to use the secured asset, or proceeds therefrom, to pay debts and expenses other than secured creditors. Secured creditors take precedent over the classification and order of payment set forth in 20 Pa.C.S.A. §3392. Secured debts must be paid before costs of administration—including your fees.
A secured creditor can have the personal representative surcharged to recover the value of the secured assets which improperly paid administration costs. The personal representative is likely to defend on the basis of advice of counsel and will file a surcharge action against the attorney for indemnification.
- Satisfy the New Jersey Non-Resident Inheritance Tax
New Jersey non-resident inheritance tax returns must be filed where a non-resident decedent died owning an interest in New Jersey real estate or tangible personal property located in New Jersey. The return does not have to be filed where the beneficiary is the decedent’s father, mother, grandparents, spouse, child, or other direct issue. The return must be filed where the beneficiaries are decedent’s siblings, surviving spouse of decedent’s child, and all other beneficiaries.
Failure to pay the tax won’t always result in a claim since the tax is due no matter what. However, if the gift is a specific devise and the will provides that taxes should be borne by the residue, then the beneficiary will not bear the tax. The beneficiary may have to pay the tax if New Jersey subsequently asserts a lien against the property. The beneficiary would not otherwise have had to pay the tax. Therefore, the beneficiary would have damages.