As Pennsylvania probate and trust administration attorneys, we often work with families who are navigating the complexities of the probate process. While many executors step into the role with the best of intentions, sometimes without the assistance of an experienced attorney, the complexities of the probate process often prove to be a stumbling block for them.  We frequently see administrations stall or lead to litigation because of avoidable errors. Whether you are an executor trying to navigate the process alone or a beneficiary concerned that an estate is being mismanaged, here are 10 common mistakes made during Pennsylvania probate.

1. Stalling or "Doing Nothing"

It is surprisingly common for someone to be named in a Will as the executor and take no action to commence the probate proceeding.  Even when someone has been officially appointed as executor, they sometimes simply stop moving forward and fail to complete the probate or distribute assets. Whether they are overwhelmed by the details or don't know the next steps, an executor who refuses to administer the estate is a problem that requires urgent legal action.

The ”do nothing” executor is especially a problem when real estate is involved.  Probate is the sole process for changing ownership of property from the name of a decedent to someone else.  A property owned by a decedent cannot be managed or sold until a probate is commenced and an executor appointed.  This can result in the liens accruing against the property, mortgages going in to default and the property is then lost to a tax or foreclosure sale.  All of the hard work of the decedent to buy that property goes to waste when their estate is not administered timely and properly. 

2. Missing Key Pennsylvania Deadlines

The Pennsylvania probate timeline is specific and failing to meet deadlines has its consequences. Executors must handle several critical filings, including:

• Sending required notices of the decedent’s death and the probate proceeding to beneficiaries.

• Advertising the probate to start the clock ticking on the deadline for creditors to file claims.  If they fail to timely file a claim, they could lose the ability to get paid.  The clock does not start ticking until the advertisement is filed, extending the time period that claims are potentially viable. 

• Missing the 5% tax discount. In Pennsylvania, if you make an advance payment of inheritance taxes within three months of the decedent’s death, the estate receives a 5% discount on the tax due. Many DIY executors are unaware of this window, effectively costing the beneficiaries thousands of dollars in unnecessary tax payments.

• Filing the Pennsylvania Inheritance Tax Return and paying taxes.  Unpaid taxes and a lien on the assets of the estate.  If taxes are not paid timely, the estate will incur interest and penalties.

• Filing an inventory of assets and required status reports.

Missing these deadlines can result in financial penalties or the loss of important tax advantages.

3. Over or Under Paying Inheritance Taxes

When it comes to tax returns, virtually nobody has filed an inheritance tax return.  Completing it and properly paying all taxes due as a result of a decedent’s death requires not only knowledge of how to fill out the tax return itself, it also requires a knowledge of inheritance tax law and applying those portions of the decedent’s Will that speak to issues involving who pays what tax on the decedent’s assets. 

Example:

A DIY Executor filed an inheritance tax return for his mother’s estate but he forgot to report and pay tax on a property his mother co-owned with another person.  The surviving co-owner sold the property a few years later and realized at that time that the inheritance tax was a lien that had to be satisfied.  It delayed the closing, caused a portion of the sale proceeds to be held in escrow and resulted in a higher tax bill than would have been payable had the original inheritance return been completed properly.

4. Ignoring or Avoiding Beneficiaries

One of the most frequent "red flags" is a lack of communication. Executors are legally required to provide specific notices and information to beneficiaries. When an executor fails to respond to requests or keep heirs informed, it often leads to suspicion and unnecessary legal challenges.

5. Failing to Protect the Estate from "Ghosting"

Identity theft targeting the deceased, or "ghosting," is a massive problem, affecting nearly 2.5 million estates annually. Because it can take months for death records to reach credit bureaus, an unknowledgeable executor may leave the estate exposed, allowing thieves to rack up charges that drain the inheritance.

6. Engaging in Self-Dealing

Self-dealing occurs when an executor uses their position to benefit themselves rather than the estate. This might include:

• Selling estate assets to themselves for below-market value.

• Distributing estate assets to themselves but not to other beneficiaries.

• Living in a decedent's property rent-free; not selling it depriving the beneficiaries of their share of the estate.

• Using estate funds to pay for personal expenses.

• Using estate funds to make improvements to real estate devised specifically to them or that they want to purchase from the estate.

7. Improperly "Marshalling" Assets

The executor has a duty to "marshal," or collect, all assets to ensure they are distributed correctly. Mistakes often occur when an executor fails to:

• Eject people, sometimes family members, from real estate owned by the decedent, allowing them to live there for nothing or below market rates and depriving beneficiaries of the share of the estate.

• Liquidate securities before a market downturn, costing the estate significant value.

• Cancel automatic subscriptions (like Netflix or utilities), which continue to drain the estate account.

• Failing to make inquiries into the location of all of the decedent’s assets.

8. Misinterpreting "Legalese" in the Will

Wills are often filled with "words of art" that can be difficult for a non-lawyer to decipher. For example, a decedent might provide specific instructions on how inheritance taxes should be allocated among beneficiaries. Misunderstanding these clauses can lead to some heirs paying far more than their fair share of taxes.  If property is left to someone specifically in the Will, does that mean that person also gets all of the contents of the property?  These are questions that often require the help of and experienced attorney to solve.

9. Navigating Conflicts of Interest

Conflicts often arise when an executor is also a beneficiary or a creditor of the estate – this is quite common. If an executor hires their own company to provide services to the estate, they may be tempted to charge higher-than-normal prices, which is a direct violation of their duty to the other heirs.

10. The "DIY" Trap: Not Hiring an Attorney

The most common mistake is attempting to settle an estate without professional guidance to "save money". In reality, the cost of an attorney is deductible for inheritance tax purposes and is shared by all beneficiaries. Without legal help, executors are almost guaranteed to make costly mistakes or significantly delay the distribution of assets.

Don’t Let Estate Problems Compound

If you are struggling with the responsibilities of being an executor, or if you are a beneficiary watching an estate stall, you don't have to handle it alone. At Fiffik Law Group, our probate attorneys specialize in helping Pennsylvanians navigate these complexities efficiently and correctly.