EPISODE 5 – Making Law Easy Show – Explaining the Registry of Wills
EPISODE 5 – Making Law Easy Show – Explaining the Registry of Wills
Hi there. Welcome to the Making Law Easy Show brought to you by 1-2-3 Law Group. My name is Karl Schieneman, a Partner of 1-2-3 Law Group. And today we are going to learn about the Registry of Wills in Pennsylvania – the Department of the Registry of Wills. I have with me a special guest, Marty Madigan, Deputy of the Registry of Wills office. He’s worked 31 years in the Registry of Wills office, and we’re glad to have you on the show.
Thank you Karl.
First of all if you could just tell what you do, and what does the Registry of Wills Office do.
Well first of all, the Registry of Wills Office is a semi judicial office. It is the responsibility of the Register of Wills to make sure that the individual who passed away, if they had a will, that their last wishes are met. We have the power to make that appointment through the will naming that person the executor. If that person dies intestate, without a will, then what happens then is different family members that would be in that highest blood class would have the right to act as the administrator of that estate. Some times that gets a little dicey and it is up to the Register to pick the best person. Sometimes there’s some family in fighting and we would have to decide who is best able to administer the estate. Other times if there is a will involved what we do is we would have conferences and actual hearings with evidentiary hearings to see that the person who executed this will was either unfit mentally to execute that will or if there was diminished capacity. Those are the two things in the state of Pennsylvania where you are able to challenge the validity of a will. That’s diminished capacity and undue influence.
OK and you hear a lot about probate, and wanting to avoid probate or the probate process. What exactly is the probate process if you could describe it.
Sure. Once an individual passes away in the state of Pennsylvania and specifically here in Allegheny County, those assets will be frozen upon his death. So it is the responsibility of the Register of Wills to appoint a person either as the executor or as the administrator for the estate. Once we would make that appointment we issue what we call short certificates or certificates of appointment, and that shows the bank lending institutions, even real estate agents, that that person is authorized to act on behalf of the estate. So what he would do is literally he would go out to all the different banks and he would liquidate all of the accounts, and he would set up what we call an estate bank account. All the monies would be put into that and out of that all the bills that the decedent made would be paid out of this account. After that, then they would pay the inheritance tax. And the inheritance tax in the state of Pennsylvania it’s based on the relationship that the decedent had with the individual with the heir. Whoever would receive that money, that heir would be responsible for paying the tax. All the debts and deductions would be deducted off of the top of the inheritance tax and then whatever other monies were left after all the bills were executed. Then what they would do they would be distributed according to the terms of the will or they would be distributed according to the intestate laws of Pennsylvania. Some of the responsibilities that an executor or administrator would have would be to make sure that all of the bills that the decease would have that they would be paid. He would have to advertise the estate, and when he advertises the estate it runs three times. You know three times, one time per week. And what that does is it would notify anybody that has any claim against this estate. They could come forward and they could file a claim or anyone owing the deceased monies could come forward and pay off that debt as well.
You mentioned that either the executor follows a process or you appoint an executor. This just sort of struck me. Which way does it seem to work better. Does it work just as easy if you appoint the executor if there is no will or do you think people should have wills.
Well absolutely I do. I think people should have wills. Because what happens as far as an intestate is concerned is that you’re leaving that to someone else to make that appointment. Normally when a person has a will they will appoint either a spouse, for example, and if not a spouse, then one of the children. They know in their own mind who would be best able to administer the estate. If you’re leaving it up to a stranger, you know, the Register of Wills in this case. Most times we get it right, but we may be appointing a person as an administrator who the deceased may not have wanted or wouldn’t have been their first choice.
How long does it take to probate a will generally?
Well the probate process is an ongoing process. Whenever you would come into the Register of Wills office you would bring the original will with a petition of probate and grant of letters with a death certificate. We would swear you in. There’s a fee that’s involved with probating the will. Initially if you came in and said that your assets were undetermined at this time, then the fee would be less than $100 to probate the will. Then the estate of course would have to be advertised. We talked about that a little earlier about that where you’re notifying the creditors that someone based away. But the probate process itself is ongoing. Normally whenever an individual days and by the time the estate is actually settled, it could be anywhere from 8 months to a year.
Wow. And you mentioned a fee of $100 if it’s an undetermined amount. How much can it range it cost to go through this process.
Well it’s an escalating fee according to the size of the estate. I’ll just give you a for instance let’s say $100,000 to $200,000, the filing fee would be for that $185. It really doesn’t get into the monies that are paid to the register of wills office for the fees are not exuberant. For a half a million dollar estate you’re looking at less than $500, maybe $600 in probate fees. But sometimes you’ll see individuals who advertise the estate and are talking about thousands of dollars that could be saved in the probate fees. That’s not the case. Now when we get into paying the inheritance tax that is where the bulk of the money will be spent.
Well how does the inheritance tax work? That’s a good segway.
The register of wills, besides being the register of wills, we are also the clerk of the orphan’s court. And one of the functions that we have to handle as the clerk of the orphan’s court. We’re the collection agency for the commonwealth. And in Allegheny County alone last year we collected in excess of $90 million. State wide the inheritance tax collects almost $700 million. So you can see it depends on what the relationship is to the deceased from parent to child, for example that would be 4 ½%. The rate between husband and wife is zero. Now you notice I said zero, and I didn’t say nothing, because what they like to do you even have to file a return just showing those assets because down the road the department of revenue, they want to check to see where those assets are after you pass away.
OK. Can I just give my money away before I die to avoid inheritance tax? Do you have any inside scoop?
You do have that Karl. You have that ability, and I’d be a willing recipient if you would want to give it to me. But seriously any transfer that would be made by you within one year of your death would be a fully taxable asset. So if you’re going to give something away, you have to make sure that you give it away longer than a year out. That’s what they call the contemplation of death law.
There seems to be a lot of those types of rules when you’re planning. Once you realize there’s a problem it’s probably too late to plan. In your 31 years of experience working in that department I can’t think of anyone better to ask this question but from your perspective what a typical mistakes made with estates.
Well one individual would come in and attempt to do this process on their own. Sometimes they look and they don’t want to pay the attorneys fees, or they may have contacted their attorney and maybe thinking that they could just go through this process without an attorney instead of doing so. And sometimes they come in, they probate the will and they get in a little bit over their heads. So sometimes it costs them a little bit more to clean up what they started than it actually would if they would just got out and talk to an attorney. Sit down and talk to them to see what the best way to proceed would be.
Alright. Great. That’s all very helpful. I appreciate you helping to clear up some of the questions the people might have on the probate process and what the register of wills does. The last area I would want to get into I know you’re an expert in this. Tonight is Monday night football, Ravens versus the Steelers. Who’s going to win the game tonight.
Well absolutely it’s going to be the Steelers I’m looking for a hard pressed contest. You know the Steelers coming out with a hard fought win. I think that’s the way it’s going to boil down.
Marty. This has been great. I appreciate you stopping in and being a guest on the show. Thank you for your time. If anyone wants to get in touch with us and have questions about estate planning, you can get in touch with us at 1-877-7-123-Law. Or visit us on the web at www.MakingLawEasy.com, which is the name of the show. Marty, thanks again for helping us out with this, and I hope you’re right about the Steelers. Take care.
Thanks a lot Karl.