When is the Reading of the Will?

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The scene opens in an oak-paneled conference room, as shafts of light descend through the large windows in the lawyer’s office onto the pages of an ancient, creased will. The grumpy lawyer slowly begins with some preamble when he is interrupted by the irritated daughter-in-law, dressed casually in black. “So, what do we get?” she exclaims, trying somehow not to look impatient.

The reading of the will! It’s that most classic of movie scenes, and we’re asked all the time. When is it? When will the reading of the will take place?

The answer, unfortunately for those who love a good bit of stage drama, is never. The “reading of the will” is not a requirement, and in Pennsylvania probate court, the will is made available to anyone who wants to review it. As a beneficiary, you have a right to see the will once it is probated, but there is never a specific “reading” for everyone to attend.

Pennsylvania probate begins with the filing of a “Petition for Grant of Letters,” and the process takes about a year to complete in most cases. The executor is responsible for ensuring:

  • that the decedent’s wishes are carried out
  • that creditors are paid according to law
  • that the beneficiaries get as much value from the estate as they can

Of course, there’s nothing stopping you from staging a reading of the will, and as executor, if you want a moment of high drama in the big mansion where someone passed away, you’re welcome to have a reading and accuse someone of murder (*our legal advice is generally not to accuse people of things*). But the “reading of the will” is not required under the law.

If you have questions about making a will, about how to get information about a will that has been probated, or how to do estate administration for someone you love, contact Cornerstone Law Firm. We’ll be happy to walk you through the process.

Am I Responsible for My Parent’s Debts?

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When a parent dies, the adult children often ask if they are responsible in any way for the debt that is left behind. The quick and easy answer is, no, you are generally not responsible for the debts of your loved one who passed away. There are exceptions however, and it is important that you take the next steps properly after someone passes to ensure that you are not liable for any debts they may have. In many cases a parent or other loved one who passes away has debts that exceed their liabilities. Even if you are named as an executor in a will, no one can require you to administer the estate, pay their debts, or otherwise deal with estate assets. However, there may be sound reasons why you want to do so. Once you are sworn in as an executor, you are required to handle the assets according to law, and you are liable if you mishandle assets.

You are only responsible for handling the assets correctly.

In many cases when we look at the assets and debts of a person who has passed away, we find that their estate is essentially bankrupt—that is, that there are not enough assets to sell in order to pay off any debts of the estate. Typical debts of someone who has passed away include medical bills, credit card bills, past due rent, or mortgage and foreclosure debts. Of course, if there are assets and they have any value, we can sometimes salvage the estate.

By opening an estate, you are not personally liable for more than what is in the estate. As a very simple example, suppose this is the estate:

            $60,000 Assets

            $100,000 Debts

In this example, if you open the estate, you are only responsible to liquidate the $60,000 in assets (that is, sell the house, stocks, car, etc. that makes up that $60,000 in value) and pay the debts you are able to (more on that below). You are not responsible to personally pay for the other $40,000 in debt as long as you follow the law.

How do you decide which debts to pay?

Deciding which debts to pay is not difficult in most cases because the law already provides for what order creditors are to be paid off. As an executor, your job (in consultation with an estate attorney) is to ensure that the top-priority creditors are paid. As long as you do that in the proper order, you are not liable for the debts that are not paid.

Why would I open an estate if I’m just going to pay off some debt?

The advantage to opening an estate that will not pay all of its debts is that we can pay the executor a fee (this is a top-priority debt) and reimburse family for funeral expenses (also a top-priority debt). A good estate attorney can help you to ensure that you are following the rules and that you will not be personally liable in the end.

However, if you open probate and misappropriate the assets or if you take assets for yourself out of probate and chose not to pay all the creditors, then you will be liable for the amount of the property that was misappropriated. You can also be liable to the Department of Revenue if you have failed to pay the taxes on the assets involved. This is why it is important to consult with a probate attorney.

Guarantors and Co-signers are still liable.

Of course, we should also take note that an individual’s death does not change your obligation to pay any debt you are a co-signer on. If you co-signed on the decedent’s student loans or their car loan, you will still be responsible for that debt, personally. This is true whether you open an estate or not—but it may be an additional reason to open an estate and see if estate assets can lawfully be used to pay off that debt.

Finally, children can be liable for misappropriating their parents’ assets during their lifetime if those assets should have been used to pay for medical care. The Department of Human Services sometimes seeks contribution for costs that were incurred by the government for medical care if the children misused or failed to preserve assets in certain situations. Once again, this would be true regardless of whether an estate is opened.

Conclusion: Call a probate attorney at Cornerstone Law Firm today

As with many legal issues, there are many complications that can arise out of an estate. If you have any particular concerns or want to get in contact with an attorney regarding an estate, give us a call at Cornerstone Law Firm.

What can I do with a short certificate?

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When you obtain a short certificate for an estate, what does it empower you to do? The short certificate is the document granted by the Register of Wills in a county to the Executor of an estate. The Executor, having named and granted these “letters of administration” is given power to sell assets belonging to the deceased person, pay their bills in the proper order, list real estate for sale, negotiate with creditors, give notice to beneficiaries and more.

For many people, the first interaction after a loved one’s death that gives rise to the need for a short certificate is the bank. Having gone to the bank to try to get their family member’s bank account they hear that the bank needs this short certificate to obtain the money. Short certificates must be honored by banks, who accept them as proof from a court that you are the designated person to deal with the assets after death and ensure that the creditors are paid. When you take the short certificate in and submit it to the bank, they can give you a check to be placed in an estate account. Often, a bank will offer to open the estate account there if you don’t already have one set up.

Additionally, if listing a house, the realtor will need the short certificate to prove that you have the right to list it. This will also be required at closing when a buyer’s agent will need to see it to verify that you have the proper authority to transfer title to the home. Once again, the short certificate is the only way to prove conclusively that you are the proper administrator of the estate.

Most creditors will accept payment even if you don’t have a short certificate, after all, who doesn’t want to get a check? But short certificates are still important when negotiating with creditors for a lessor claim. In some cases, not all creditors can be paid, and the Executor will be called upon to pay debts in their proper order and to attempt to reasonably compromise some debts to ensure that more creditors are able to get money. Please note that this should be done with the guidance of counsel, as there are several legal issues that can arise if you don’t handle this correctly. Nonetheless, the short certificate is the document that demonstrates your authority to settle the claims on behalf of the estate.

Why is it called a short certificate? What is the short certificate “short” for? Technically, the short certificate is a one-page version of the Grant of Letters, which is a long document issued by the Register of Wills. In most cases, the Registers of Wills don’t even issue these documents anymore. They are kept on file in case one is needed, but the short certificate is all that is used in practice. The “short certificate” is the stand in for the longer court order.

Opening an estate comes with many responsibilities and also empowers the Executor to make decisions on behalf of the estate. But in closing, here’s an important point: opening an estate is not always the right decision. In fact, in some cases it is a major mistake. There are tax consequences to how estates are handled and there can be personal liability on the Executor who opens the estate. Accordingly, it is strongly recommended that you seek legal counsel if you’re thinking of opening an estate for a loved one who has passed away.

If you have questions about these issues, or about how to use the short certificate once you’ve obtained it, call Cornerstone Law Firm for a consultation so that we can help you take your next steps.

The Right of Sepulchre

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When a loved one passes away, there can be disputes regarding how to treat and dispose of the body. Ideally, the decedent would have included clear funeral instructions in his or her last will and testament. In some cases, those wishes might have been communicated orally or in another kind of writing to a family member. What happens when certain family members or friends want to disregard the loved one’s wishes while others wish to carry them out?

Under Pennsylvania law, each person is entitled to dictate the terms under which the body is buried or otherwise disposed of after death. This can include cremation or more modern burial innovations such as composting. If the decedent’s wishes can be shown in a will or other proven writing, these wishes must be followed. This is known as the Common Law Right of Sepulchre. Sepulchre is just a fancy old English word for burial.

Fights over how to deal with a decedent’s remains, where to have the burial, or where to keep an urn full of ashes can arise out of estate disputes in which one or more beneficiaries are trying to use the decedent’s remains as leverage. This is an awful circumstance to bear, and it is important to stand up for the decedent’s rights in court, if necessary. If a decedent’s wishes are being disregarded in this way or for any other reason, the descendants have standing to bring a challenge on that person’s behalf insisting that those wishes be followed. It is important to move quickly in such situations as some methods of laying a person to rest cannot be undone. This is why it is critical to handle these disputes correctly and with urgency.

The Right of Sepulchre also can be implicated if the family brings a wrongful death claim. These kinds of claims can require examination of the body such as an autopsy well after interment or entombment, and exhumation can conflict with the religious beliefs of the decedent. Another instance in which the Right of Sepulchre is implicated is when a graveyard is excavated. This can occur when an entity buys the land and wishes to pave over or move grave sites. In these cases, the Right of Sepulchre is an important part of defending the right of the deceased individuals to rest in peace.

Our attorneys have helped individuals defend their loved ones’ right to choose their manner of burial. If you have questions about the Right of Sepulchre or your family members’ right to dictate their wishes on these matters, contact Cornerstone Law Firm today so we can discuss your options.

Guardianship: When Loved Ones Cannot Care for Themselves

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When someone you love is incapable of self-care physically or financially, a guardianship is often the best approach. In this article we will discuss the pros and cons of pursing guardianship, as well as what you will need to present to a court to obtain an order for care and maintenance of your loved one for the long-term.

What is the difference between a Guardianship and a Power of Attorney?

Guardianship is stronger than a power of attorney. A power of attorney document allows you to make affirmative decisions on another’s behalf. However, it does not permit you to override the decisions that person has made. For example, a power of attorney will allow you to write checks for your aging parents, but a guardianship will allow you to keep them from writing checks to others. A guardianship is a much more sweeping power and allows you to make financial and medical decisions on their behalf even over their objection. This is why the guardianship process is rather intense. It assumes that you will be able to prove total incapacity on the part of the person to be under your guardianship.

Determining whether a power of attorney designation will take care of your situation really comes down to whether your loved one has mental capacity and is cooperative with your assistance. If the person has capacity and is cooperative, a power of attorney document will solve most of your problems. If not, then a guardianship might be your only option.

Is your loved one incapacitated?

To prevail in a guardianship, you will have to show that the individual does not have the capacity to make independent decisions. This requires a doctor’s expert report. Usually, the doctor who is chosen is either a primary care physician who has known the person for many years and can write about any mental decline or a specialist in the area in which the person’s decline occurred. This might mean a neurologist or a psychiatrist. In the case of a younger person whose limitations are the result of trauma or a condition such as autism, a specialist in that area is more appropriate. Usually, these doctors do not need to testify. When required to testify, courts often allow them to “appear” remotely or by telephone. Different judges have different preferences on this point.

Many counties require that the expert complete and sign a specific form. This report form prompts the doctor to provide a medical opinion that the person is either partially or completely incapacitated and incapable of self-care.

Who is the appropriate Guardian?

After determining that someone is incapacitated, the next concern for the court to address is who the appropriate guardian would be? The law prefers the individual named in a power of attorney form, which is another reason that good estate planning documents are so important for every person to have. If the agent under a power of attorney document is either unavailable or judicially declared to be incompetent, the court will prefer a family member. However, courts often choose corporate guardians as a result of abuse by family members, neglect, or misuse of funds, among other things.

A guardian’s background must be relatively clean. This means that the person has avoided major criminal activity and also has been cleared of any bankruptcies in the recent past. Courts can overlook these factors but often look suspiciously upon those applying to be guardians who have similar blemishes in their backgrounds. Of course, it is also important for the guardian not to have participated in any neglect or abuse of the individual involved or of others.

Opposition by Other Interested Parties

In the event that a nursing home or a family member moves for a guardianship alleging incapacity, other interested parties could object. This could include a medical facility and often includes family members who believe either that the person is not incapacitated or that a different guardian should be chosen. Of course, the individual involved has the right to counsel as well. The bar for proving incapacity is fairly high under Pennsylvania law. This means that the individual who has a lawyer appointed by the court can prove capacity by a relatively low amount of mental ability. This is partly how the court safeguards that individual’s rights. Interested parties also may approach the court prior to the hearing to state their interest in the individual’s care.

Temporary or Permanent

Once the court has determined that someone needs a guardian, it can allow for either a temporary or a permanent guardianship. In some respect, every guardianship is temporary because the court can modify it later in the interest of the individual. In practice, however, permanent guardianships are granted when there is no hope of improvement in the person’s condition. In rare circumstances, such as when someone has slipped into a coma from an accident or from medical inducement, a temporary guardianship might be necessary to obtain financial authority to pay bills and care for children or other family members. In these cases, the court will set timeframes for the reassessment of the guardianship.

Conclusion

Walking through a guardianship can be a frightening prospect for many families, and the guardianship petition is not the end of the process. Instead, being granted guardianship is really the beginning. Reports must be filed in the court, and expenses must be issued properly to maintain access to government benefits. In some cases, special needs trusts and complex estate planning tools must be considered. If you are or a family member is considering a guardianship, contact Cornerstone Law Firm today so that we can help guide you through this very important decision.

Reaching Family Settlement Agreements in Estates

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When a family member passes away, many factors can combine to create conflict over how to resolve the estate. Oral promises made by the decedent while alive, or a confusing portion of a will, or an apparent change in circumstances since the will was drafted, all can give rise to disputes over how the estate should be settled. In today’s blog, we will discuss how to reach a family settlement agreement designed to resolve the estate and avoid any dispute in court over an accounting.

Negotiating with family can be difficult. Negotiating over assets which might have changed in value can make these negotiations even more complicated. However, in a family settlement agreement, the parties agree that they will sign a document confirming the way that the estate should be settled rather than going to court. In some cases, this is done without any dispute at all. The parties each review the proposed settlement and confirm that they believe it is the appropriate way to distribute the estate assets. Additionally, they waive any claims against the executor of the estate in exchange for their share and confirm the way that all bills were paid and the way that the estate was handled.

Of course, these decisions are not always so easy and can be drawn out in more complicated situations. An executor who proposes a breakdown that the beneficiaries believe does not follow the will appropriately might face an accounting action. If a dispute arises over how to finalize the estate, several things can be done to resolve the matter outside of court. First, the parties can negotiate between counsel for the beneficiaries and the executor. The probate attorney handling the estate represents the executor only and not the beneficiaries, so they will need to retain their own counsel. In a situation with multiple executors, and one in which those executors disagree, the executors may wish to seek their own counsel.

Second, the parties can seek a mediation and go before someone who is not attached to the situation at all and who can help work out the parties’ differences. A mediator should try to find a middle ground where the case can be settled. It is often said that a mediator’s best result comes when they find a resolution that does not please any party completely but that is better than the alternative of spending a lot of money and going to court. Compromise is usually involved, and it is important to remember that a mediation might not get you everything that you want as part of your final agreement. Still, mediations are convenient because they do not force anyone into a decision. They are an effort at finding an appropriate compromise after seeing the facts in light of an outside party’s perspective.

Finally, the parties can submit a dispute to a binding arbitration. The family may be able to pick a family member who is truly neutral or ask a pastor or other community leader to help them resolve the dispute. There also are companies which can be hired to send an arbiter to hear the dispute. With today’s modern technology, these arbitrations can even happen remotely without everyone having to gather in the same place.

There are many other potential ways to reach family settlement agreements, but these are some of the most common. If you are in a probate dispute, or if you believe that your matter can be worked out amicably without going to court but still wish to seek legal guidance, contact the estate administration attorneys at Cornerstone Law Firm to learn more today.

Drafting a Will: What Should I Include?

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When drafting your last will and testament, there are several important questions you will need to ask. While drafting a will can be a fairly simple process for most people, it still contains a few potentially stressful components. This article will lay out for you some of the questions you should be prepared to answer in your first appointment with your estate planning attorney.

Who gets my possessions when I die?

Of course, the most obvious question when drafting a will is who gets your possessions when you pass away. At its simplest level, this is divided in percentages between the different people you want to receive your things. We typically encourage people not to get too detailed with their precise possessions. In other words, do not name the type of car you have and say who gets it. Rather, try to figure out who should get a certain share of your total estate. The reason for this is that what you own is very likely to change before your death. If you leave a Ferrari to one of your children in your will, but you die owning a different car, there is no way to leave the Ferrari that was promised. As a result, the beneficiary loses a significant part of the inheritance that you wanted to leave for that person.

Who should care for your children and any money left for them when you pass?

While the distribution of your possessions might be the most obvious issue to consider, determining who will care for your children is certainly the most important. If you have minor children, your will is how you designate who will be their guardian in the event that you pass away. In addition, you will need to select a trustee for their funds. If you leave money behind for minor children, it will be left in trust under Pennsylvania law until they reach 21 years of age. You can alter this age in your will and include other provisions regarding the type of trust you want for them. These provisions can include requiring that they graduate college before receiving funds, that they abstain from criminal activity, or any other restrictions you wish.

The trustee is the individual who is in charge of making sure that the money is spent for their care, maintenance, and support while minors, and that it is wisely invested so that there is something left for them once they reach the designated age. A common question we get at this stage of the process is whether the guardian and the trustee can be the same person or people, and the answer is yes. You might think to put different people in these roles because someone is good at raising kids but not good with money, or vice-versa. However, selecting the same person or people for both roles is more practical as it gives those raising your children access to the funds meant for their benefit.

Who is the personal representative of your estate?

The final important consideration is selecting the personal representative of the estate. This is the executor who is charged under law with administering your estate. This person is typically paid a fee out of the estate for the work they do on your behalf, so you do not have to think of this as a burden. The executor also will hire attorneys, accountants, and other professionals to ensure that the estate is administered properly. This should be someone you trust to make sure that your wishes are carried out. Preferably, you want to select someone who is diligent, hardworking, and who can handle the details of the estate.

What about other assets?

Some assets such as your IRA, life insurance, and 401K do not pass by your will. These are considered non-probate assets, meaning that they are passed according to their beneficiary designations. If no beneficiary form is listed for such an asset, then it will pass by the will you have drafted, but this is typically something we want to avoid. Accordingly, it is important that you check the beneficiary forms for these assets to ensure that they are passing to the loved ones you intend.

Conclusion

Get your estate plans started today. No one likes to think about their last will and testament, and some people are even superstitious about drafting one, but there is no need for superstition or fear when it comes to wills. They are important documents which ensure that your estate passes to the correct people and that your children or other heirs are taken care of once you pass away.

We have covered only the basics in this article, but there is much more you can do with wills and other estate planning tools, including trusts and business succession plans. If you have questions about these topics, give our attorneys a call so that we can set up a time to meet with you and walk you through your estate plan.

Does my College Aged Student Need a Power of Attorney?

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As fall arrives and students move off to college, parents often ask whether their student needs a power of attorney (POA) or medical power of attorney form. Power of attorney forms allow an Agent (Parent) to make financial decisions on behalf of the Principal (Student). In other words, by executing a power of attorney form, your student can make it so that you are able to:

  • make financial decisions for them
  • move money out of bank accounts
  • access their tuition records at the college
  • and more.

A medical power of attorney form does the same thing, but for healthcare. Medical power of attorney allows you to:

  • call and get medical records
  • get test results
  • find out if they tested positive for COVID
  • and more.

To answer the question directly, we usually tell parents that they don’t have to have these forms. While it can make life more convenient, it’s not strictly necessary. As long as your student is good about communicating with you, they can do anything that needs to be done once they discuss it with you. POAs can be helpful forms to have, however. Some parents prefer to be able to move money, make decisions, access accounts, and more, without having to bother the student who is currently in classes, and hopefully studying very hard. For a financial POA, it is important to remember that you also have to fill out FERPA (Federal Education Rights and Privacy Act) forms with your college. FERPA gives students certain privacy rights even against family members who are paying college bills. Accordingly, your student will need to fill out forms with the college acknowledging that you have a right to access information for them, even with a valid power of attorney.

Power of attorney forms are very helpful for students who are studying abroad. For example, they can help if the student has an emergency or doesn’t have access to finances while in another country. POAs would allow you to pay bills or legally sign for them. We strongly recommend power of attorney for people who are leaving to go overseas or who are joining the military.

If you have questions about getting ready for your student to go to college, contact Cornerstone Law Firm and meet with one of our Estate Planning attorneys to learn more.

What is a Power of Attorney in Pennsylvania?

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Power of Attorney is a document granting one person the ability to make decisions regarding property and possessions on behalf of another. The power of attorney document (POA) is named this because the agent can act in many ways as an attorney can. Of course, this does not mean that your agent can represent you in court or perform legal work for you, but it does mean that he or she can appear on your behalf before any private party as if you yourself were present.

The POA only lasts while you are living. After you pass, your agent will no longer have the power to make decisions on your behalf regarding property, possessions, or anything else. After death, the executor named in your will takes over and opens a probate estate.

POAs are not only for the elderly, incapacitated or infirm. A POA allows you and your spouse to have unfettered access to each other’s financial affairs, even as it relates to work-related documents such as 401K or other retirement plans. POAs also can provide for business succession or allow someone to be appointed for business purposes in the event that you are disabled temporarily or permanently. POAs also are used when a person plans to go overseas and needs someone in the United States to help children or other dependents gain access to bank accounts during that time.

Guardianship

In the event that someone seeks a guardianship over you, the POA also names the person to be your guardian. The courts are bound by statute to honor this choice in a POA unless clear grounds to set aside the named agent are demonstrated.

Duties of the Agent Under a POA

If you have been named as an agent under a POA, what are your duties to the principal? Generally, you have duties:

  • of care
  • of confidence
  • of diligence
  • of loyalty
  • to keep funds separate
  • to keep records of transactions
  • to act in the best interest of the principal

This means that you cannot take the principal’s money and run off to Vegas. It also means that you cannot take all the principal’s money and invest it in a single stock or make other risky investment decisions. The POA creates an important responsibility because it allows the agent to help the principal make sound financial decisions, but the agent is also liable for poor decisions made on the principal’s behalf.

Revoking a POA

Unfortunately, POAs are sometimes abused. In the case of abuse, you can revoke the power you have given to your agent. You can do so with or without cause and at any time, but it is important to note that every action the agent has taken on your behalf will be considered ratified by you. In other words, you cannot claim that you did not authorize a specific action taken on your behalf by your agent while the POA was in effect. The POA grants that power even if it has been abused. Of course, you can sue the agent who has acted improperly under the POA; however, third parties are entitled to rely upon the POA. This is part of what makes it so powerful. No one other than you and your agent can question the validity of the document.

So why won’t the bank let me get into a bank account?

A common question we receive concerning POAs is why a bank or other financial institution would not honor the document. In most cases, this occurs because the principal has died, and the agent is attempting to access the bank account of the deceased principal. This is a common mistake and is easily solved. The executor named in the will, or the administrator if there is no will, must open a probate estate to obtain access to bank accounts and other financial assets of the deceased principal.

Conclusion

If you are interested in learning more about POAs or need one for yourself or someone else, contact Cornerstone Law Firm. Our experienced estate planning attorneys can help you and your loved ones determine whether a POA is right for you.

Giving Notice to Estate Beneficiaries

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Beneficiaries of an estate are entitled to notice when the estate is being probated, and it’s the executor’s job to send the notice. Today, we’ll give a brief overview on how to fulfill this part of the estate process.

Giving notice to the beneficiaries is required by statute and should typically be done at the outset of the estate. Giving notice is usually done by mail on the standard form provided by the Register of Wills of your county. When you send this out, you should also keep a certificate of service to prove that you sent it. The executor or administrator will need to file a statement with the Register of Wills that notice was sent. Ordinarily, however, you will not file the actual statements that were sent.

Giving notice to the beneficiaries is not only required by statute. It also has several positive purposes. First, it lets the beneficiaries know who’s handling the estate and who they’ll need to communicate with as the process goes forward. Because many beneficiaries do not realize that estates can take several months to settle, they can often be antsy about when they’ll receive their money or other property after someone has passed away. Second, it ensures that none of the beneficiaries come forward trying to claim that the estate is being mismanaged or that no estate was opened, causing a conflict before the court as to who the proper executor or administrator should be. Third, the process of identifying all the beneficiaries helps the executor/administrator to keep clear in their own mind who will receive what or what percentage each is entitled to at the end of the probate process.

If you’ve been named executor/administrator of an estate, and you have questions about probate, contact Cornerstone Law Firm. Our estate attorneys can help you in reconciling your loved one’s estate, ensuring that it is handled correctly and that there are no claims against you in the process.