1. If you have agreed to serve as the executor of a family member’s estate, you will be responsible for guiding the estate through probate. This involves taking inventory and distributing the person’s assets after he or she dies, with the court’s oversight.

   Familiarize yourself with the way Pennsylvania probate works before becoming an executor.

   Exempt property

   Certain assets have exemption from Pennsylvania probate, which means that the executor does not need court approval to transfer these items to the named beneficiary. Exempt property includes:

   • Outstanding salary or wages up to $10,000
   • Cash to a spouse or another close family member up to $10,000
   • Living trust assets
   • Payable on death bank accounts, retirement plans, life insurance policies and other investments with a designated beneficiary
   • Co-owned assets, such as real estate, that the person owned with his or her spouse

   Types of Pennsylvania probate

   If the estate contains less than $50,000 in non-exempt assets, the executor can apply for the simplified probate process. The threshold applies only after the estate pays for the person’s funeral expenses. The local court can approve simplified probate, allowing the executor to move forward with paying the estate’s debts and distributing property.

   Larger estates must undergo Pennsylvania’s formal probate process. You must submit the will and a petition for probate to the register of wills in the county where the deceased person lived, along with the required filing fee.

   Navigating probate

   The court will review the will and issue a document that gives you the authority to act in the estate’s interest, known as the Letters Testamentary. When the will has no witnesses with confirmation from a notary, you cannot distribute the person’s assets until you have sworn statements from all witnesses.

   Once you have received the Letters Testamentary, you must publish notice of probate in two local papers so that creditors, heirs and the public have a chance to make claims to the estate.

1. Failing to consider alternatives to formal probate. Failing to consider if an alternative to formal probate can be used in lieu of formal probate is a very common mistake. In Illinois, for example, a small estate affidavit may be an option instead of formal probate and may save the estate a considerable amount of money and save the beneficiaries a considerable amount of time.
2. Failing to handle assets correctly. Most first-time Executors are not sure what steps need to be taken and when they need to be taken. Consequently, assets are sometimes not handled properly. As the Executor or Personal Representative of an estate, one of the first things you need to do is to secure all assets as soon as possible. This can mean different things depending on the asset in question. For financial accounts, you may just need to close the account, for example, whereas for real property you may need to physically lock up the property and arrange for its maintenance and upkeep.
3. Failing to properly categorize assets. Not all estate assets are required to go through probate. As you identify estate assets, make sure you put them in the appropriate category. Common examples of non-probate assets include:
   1. Trust assets
   2. Proceeds of a life insurance policy
   3. Certain types of jointly help property
   4. Funds held in certain types of retirement accounts

4. Forgetting “Date of Death” values. One of the things you will need is a “Date of Death” value for all estate assets. The sooner you get started on these the easier they will be to calculate. You may need to retain the services of professional estate appraiser or real estate appraisers to help you with this task.
5. Failing to hire an probate attorney. It is usually a mistake to not retain the services of an experienced probate attorney. Hiring an experienced attorney will dramatically reduce the likelihood that you will make costly mistakes during the probate process.
6. Failing to properly handle creditors. All potential creditors of the estate must receive notice of the probate of the estate. Known creditors can be notified personally; however, unknown creditors must receive notice via publication in a local newspaper. You must then keep the probate open for a statutory period of time to give creditors the opportunity to file a claim against the estate.
7. Failing to communicate with beneficiaries/heirs of the estate. While this is not a legal error, it can be a huge mistake. Sometimes it can even lead to unnecessary litigation. Remember, beneficiaries/heirs are also dealing with heightened emotions and they are dependent on you to let them know what is going on with the estate. This is yet another reason to retain the services of a probate attorney because your attorney can act as your conduit of information with the beneficiaries/heirs as well as creditors.
8. Distributing assets too soon. As the Executor/Administrator you have the authority to approve creditor claims and pay creditors as well as to distribute assets to intended beneficiaries. Sometimes, however, an estate does not have sufficient assets to pay all claims and honor gifts in a Will. When that is the case, creditors must be prioritized according to law and assets distributed according to that priority. If you fail to follow the law and distribute assets accordingly, you could be held personally liable.
9. Calculating estate taxes incorrectly. All estates are potentially subject to federal gift and estate taxes. In addition, the State of Illinois also imposes a state-level estate tax. Failing to properly calculate both federal and state estate taxes can be a costly mistake. Estate tax returns must also be filed on by the Executor on behalf of the estate. This is yet another reason to work with an estate planning attorney to prevent making a mistake that could dramatically diminish the value of the estate that is left for beneficiaries.
10. Forgetting to submit a closing inventory. Some courts require an Executor to file a closing inventory at the end of the probate process. It can be easy to forget this after the lengthy probate process.

What Is Probate and What Function Does It Serve?

At the time of your death, you will leave behind an estate that consists of all the assets you owned or had an ownership interest in at the time of death. This includes both real and personal property as well as both tangible and intangible assets. Probate is the legal process that many of those assets must go through before eventually being transferred to the intended beneficiaries or legal heirs of the estate. Probate also ensures that all estate assets will be identified, located, secured, and valued as well as all creditors notified and provided with the opportunity to file claims against the estate. Federal and/or state gift and estate taxes are also paid as part of the probate process. If there is a Last Will and Testament, probate also authenticates the Will, or in the alternative, provides the legal forum for contesting the authenticity of the Will.

Why Does It Matter If Assets Are Subject to Probate?

If you are unfamiliar with what happens during the probate of an estate, you may wonder why it matters if assets are required to be part of that process. The answer can be found in the time and money expended on the probate process. In the State of Illinois, for example, creditors have a minimum of three months and may have up to two years just to file claims against the estate. Those claims must then be evaluated and paid if approved. That means that even a relatively simple estate could take anywhere from several months to several years to make it through the probate process. The assets that are art of this process, therefore, remain tied up in probate until the end of the process. Add to that the cost of probate and it becomes clear why limiting your estate’s exposure to probate is a worthwhile estate planning goal. One of the easiest ways to accomplish this goal is to convert as many assets as possible to non-probate assets.

What Is a Non-Probate Asset?

Fortunately, not all assets are subject to the probate process. These non-probate assets bypass probate altogether and can be distributed to the intended beneficiaries almost immediately after your death. Among the more common non-probate assets are:

• Assets held in a trust – whereas your Will must be submitted for probate, a trust does not. Assets held by the trust are also not subject to probate and can, therefore, be distributed to beneficiaries right away if the terms of the trust dictate that they be.
• Certain types of jointly held property – real property, for example, can be held jointly with rights of survivorship, allowing your interest in the property to pass directly to the co-owner upon your death without first going through probate.
• Accounts designated as POD or TOD – certain accounts can also be designated as “Payable on Death (POD)” or “Transfer on Death (TOD)” accounts which allows you to designate a beneficiary who will automatically become the owner of the assets held in the account upon your death. Unlike jointly held assets, however, a beneficiary of a POD or TOD account has no ownership interest in the asset while you are alive.
• Proceeds of a life insurance policy – proceeds of an insurance policy can be paid out directly to the named beneficiaries without going through probate.
• Retirement accounts – funds held in many types of retirement accounts, such as an IRA or 401(k) are also often non-probate assets.

By converting as many of your estate assets as possible to non-probate assets you can significantly decrease your estate’s exposure to the probate process after you are gone.