Why and how to advertise an estate (or trust) administration

You may have noticed legal notices in the newspaper, mixed in with the classified ads, as you turned pages looking for the comics.

If you look closely, you will often see advertisements announcing that the Register of Wills has opened an estate in the name of someone recently deceased, and has appointed an executor to administer the estate.

Why do these ads run, and how is estate advertising done properly?

Pennsylvania law requires the executor to advertise the estate to “request all persons having claims against the estate of the decedent to make known the same to [the executor] or his attorney, and all persons indebted to the decedent to make payment to [the executor] without delay.” (20 Pa. C.S.A. § 3162.)

Advertisement must be made immediately after the estate is opened in a newspaper of general circulation “at or near the place where the decedent resided” and also in the legal periodical designated by the court for publication of such notices. The ad must run once a week for three successive weeks, and must contain the language described in the previous paragraph, along with the name and address of the executor.

The Register of Wills in the county where the estate was opened can help you determine which publications to use. Call the appropriate newspaper and legal periodical for assistance in placing an ad with the required language.

Advertising the estate serves at least two important purposes. First, it allows any potential creditors or claimants one year to makes claims known to the executor. After a year, claims against the estate will usually not be honored, and the executor may distribute the assets of the estate without fear of claims from unknown sources.

Second, advertisement starts the clock ticking on the allowable time for closing the estate. By law, an executor may file an account of the estate administration with the court “after four months from the first complete advertisement” of the estate.

In some cases, there is no probate estate filed with the Register of Wills because all assets of the decedent pass to beneficiaries by means of a revocable trust. The trustee of such a trust may also advertise in the same manner and thereby foreclose claims made more than a year after advertisement. (20 Pa. C.S.A. § 7755.)

 

Attorney fees in probate: how do Pennsylvania lawyers charge?

atty-feesFor many reasons, executors are well advised to use legal counsel to help them navigate through the probate process, look for tax savings, and make sure everything is done properly.

How lawyers charge varies from state to state. This blog post explains the rules governing how Pennsylvania lawyers can charge for their services.

Pennsylvania rules

Under Pennsylvania law, an attorney fee must be “fair and reasonable.” According to Pennsylvania’s Supreme Court:

“What is a fair and reasonable fee is sometimes a delicate, and at times a difficult question. The facts and factors to be taken into consideration in determining the fee or compensation payable to an attorney include: the amount of work performed; the character of the services rendered; the difficulty of the problems involved; the importance of the litigation; the amount of money or value of the property in question; the degree of responsibility incurred; whether the fund involved was ‘created’ by the attorney; the professional skill and standing of the attorney in his profession; the results he was able to obtain; the ability of the client to pay a reasonable fee for the services rendered; and, very importantly, the amount of money or the value of the property in question.” (LaRocca Estate, 431 Pa. 542, 546, 246 A.2d 337, 339 (1968).)

In the context of probate fees, a reference often cited for calculation of reasonable attorney fees comes from a 1983 case called the Johnson Estate, in which an Orphans’ Court judge provided the following schedule:

The Johnson Estate

The Johnson Estate

Following that schedule would result in fees in these amounts for estates of various sizes:

Probate-Fee_chartHowever, billing according to the Johnson Estate chart is not the only alternative. Some lawyers will charge a certain fixed percentage (say 5%), or quote a flat fee tailored the individual estate.

Yet another alternative is hourly billing. An attorney can simply charge for the time expended on the matter, perhaps with different rates for attorney and paralegal time. The resulting fee could be less than a fee charged according to the value of the estate, but it could also be higher, depending on the demands of the estate.

Sykes Elder Law approach

Every professional needs to be compensated fairly, and we’re no different.

But we have always believed that our fee charged for estate work should not be higher simply because the estate contains more assets. For example, if a person dies owning a house, an IRA, an investment account, and a checking and savings account at a bank, it takes us about the same amount to administer the estate, whether it totals $600,000 or $2.3 million.

If we charged according to the Johnson Estate model, the heirs of the $2.3 million estate would pay $36,500 more in fees ($58,250 minus $21,759) than the heirs of the $600,000 estate, for probably the same amount of work.

Granted, there are some reasons why an estate with more assets may require more work. If it’s large enough, it could involve the filing of a federal estate tax return. If the estate generates more income while it is being settled, the estate tax return will take more time. If the assets are numerous, spread out over many accounts, or involve ongoing business concerns, it will take more time to get the estate ready for distribution to heirs.

In general, though, our experience is that an hourly rate results in cost savings to the client in most cases.

Some people like to know up front what the fee will be, without the variability that comes with charging according to the time expended. For those clients, we are willing to quote a flat fee that is charged throughout the course of the engagement, as it is earned. The flat fee is based on our estimate of what it will take to settle the estate, and for that reason (especially on larger estates) it generally compares favorably to charging a percentage.

If you would like to consult with us about an estate you need to administer, feel free to call us to discuss your situation, and find out how we can settle the estate professionally for a reasonable fee.

What is a “self-proved” or “self-proving” will in Pennsylvania?

If you’re the executor of an estate, you want to be able to walk into the register of wills office, present the original will (along with other required materials), get sworn in, obtain the documents you need, and walk out ready to start settling the estate.

A “self-proved” or “self-proving” will is going to help.

If you are doing your estate planning now, make things easier for your executor by signing a will that is self-proved. (I will discuss how shortly.)

Background

To make a valid will in Pennsylvania, you must put it in writing and sign it at the end. If you can only make an “x” or some other mark instead of signing, two witnesses must be present and must also sign their names to the will in your presence. If you can’t sign or even make a mark, you can authorize someone else to sign for you, but again, you must have two witnesses who also sign their names to the will in your presence.

In order for the will to be accepted by the register of wills to open an estate, Pennsylvania law requires that the will be “proved by the oaths or affirmations of two competent witnesses.”

So if you had simply signed your will in front of two witnesses, those witnesses could appear at the register of wills office and swear under oath that they did indeed watch you sign that will. But what an inconvenience for the witnesses!

And what if you signed the will 30 years before you died? Will the witnesses still remember? Are they still alive? Can they be found? If not, can someone else swear that they recognize your signature on the will?

Self-proved will

A self-proved (sometimes called “self-proving”) will solves this problem.

If the will contains certain acknowledgements and affidavits, the register of wills shall accept the will without the need of witnesses to the signature.

Here is an example of an acknowledgement and affidavit that would be acceptable under Pennsylvania law:

When it won’t be accepted

There are three situations in which the register of wills would not accept a self-proved will:

1. When the validity of the will is being contested;

2. When the will is signed by mark; and

3. When the will is signed by someone else (as described above in the first paragraph under Background).

In these situations, you’ll need to have witnesses appear or submit sworn statements.

Execution

Finally, it’s important to remember that to make an effective self-proved will, the document must be executed correctly.

You’re not required to use the services of an attorney, but a qualified attorney can often help you make sure your will is drafted and executed properly.

New probate petition form required

The Supreme Court of Pennsylvania has adopted a new form to be used in opening probate estates.

The new form is not radically different from the current form, but in my opinion it is an improvement. It arranges information in a clearer, more logical fashion.

Use of the new form will be required beginning November 10, 2011.

The new form can be found here.

The Supreme Court’s order adopting the new form can be found here.

Can you transfer auto title without a probate estate?

Whether or not there is a probate estate, title can be passed to others by submitting the right forms with the Pennsylvania Bureau of Motor Vehicles. (Procedure in other states may be different.)

Form MV-39 contains detailed instructions on what you will need to submit, which varies depending on how the car was titled.

Keep in mind that to pass title using that form, all of the deceased person’s debts must be paid and you will need to submit proof of death (either an original death certificate or the certification of an attending physician or funeral director on the Form MV-39).