How to be an Executor in Pennsylvania | Patti Spencer

By Patti S. Spencer ESQ
HOW TO BE AN
IN PENNSYLVANIA
EXECUTOR

How To Be An Executor In Pennsylvania
2
About Patti
Patti S. Spencer. Esq. has been practicing law for
35 years and continues to focus her practice on
estate planning, probate, trusts, taxation, and
closely-held business issues. Ms. Spencer serves
as an Executor or trustee when requested to do
so by clients and often works as a consultant
to other attorneys and financial professionals in
estate planning, trust and taxation matters as
well as giving expert witness testimony. Before
founding Spencer Law Firm in 1996, Ms. Spencer
was the Head of the Personal Trust Department at
a regional bank in Pennsylvania.
She graduated Summa Cum Laude from Dickinson
College and received her J.D. and LL.M. in
Taxation from Boston University School of Law.
She is a member of both the Pennsylvania and
Massachusetts Bars. She has taught courses in
Estate and Tax Law for Boston University School
of Law and for Franklin and Marshall College.
Her column, Taxing Matters, appeared weekly in
the “Business Monday” section of the Lancaster
Intelligence Journal for 14 years. She is a frequent
lecturer and is the author of numerous articles on
estate planning topics. Ms. Spencer was named
one of Pennsylvania’s Top 50 Business Women
for 2000 and has been elected as a fellow to the
American College of Trust and Estate Counsel.
Your Estate Matters, a book which is a
compilation of Ms. Spencer’s columns was
published in January 2015.
Ms. Spencer is also the author of a reference book
for lawyers: Pennsylvania Estate Planning, Wills
and Trusts Library Forms and Practice Manual,
published in 2007 and updated annually.
Patti S. Spencer ESQ
Contact Patti
T: 717-394-1131
E: info@spencerlawfirm.com
320 Race Ave
Lancaster, PA 17603
Spencer Law Firm LLC
www.spencerlawfirm.com

3
Table of Contents
5 - First Things
6 - Who Is In Charge?
8 - Do You Need a Lawyer
10 - What Does An Executor Do?
13 - Personal Liability
16 - Things To Do ASAP
20 - Within Three Months
22 - Within Six Months
23 - Within Nine Months
23 - After One Year
15 - Executor’s Checklist
4 - You = Executor

4
What does that mean?
It means you will be in charge of settling
the estate:
• Gathering all the assets
• Paying the bills and claims
• Calculating and paying the
inheritance tax
• Taking care of the decedent’s
income taxes
• Negotiating sales of assets
...and much more.
This e-book will explain you role
and your responsibilities – what
you need to do. It includes a
checklist of things to be done.
In this e-book when we talk
about the Executor...
...that means you.
You just got word. Someone near and dear to you has died.
You find that you are named as Executor.
You = Executor

5
Funeral arrangements and disposition of the body.
Many folks have pre planned their own funeral or other arrangements. (You should
too. This is a wonderful gift to your family so they know what you wanted and
can be guided by your wishes.) Try to find out if your loved one has done this.
Check local funeral homes. Often families have a tradition of using a particular
funeral home. A funeral home can remove the body and then transfer it if you find
instructions for another facility later.
Customs in this area are rapidly changing.
Some folks arrange for direct cremation. Some do not want a funeral at all. Many
want a formal proceeding with a viewing, vesting hours, funeral, interment and
reception. Some folks say in their will what they want but realistically, the funeral
is usually long over by the time the will is probated and the Executor appointed.
In Pennsylvania the actual ownership of the remains passes to the next of kin.
Who pays?
Be wary of signing contracts which may obligate you personally to pay for the
funeral. If the decedent had no assets or the estate was insolvent (meaning
the decedent’s debts exceed the assets available to pay them) there may be
insufficient money in the estate.
Whoever pays for the funeral is entitled to reimbursement from the estate - if
there is one. Often the surviving spouse or next of kin will foot the bill.
What if there is disagreement about arrangements?
In the extreme case, when an agreement cannot be reached, there is no alternative
but to go to court.
First Things

6
If there is a will
If the decedent left a will, the named Executor must be sworn in and given
authority by the Register of Wills in the county where the decedent resided.
Sometimes a named Executor renounces the appointment, declining to serve.
If a successor is named the successor can become Executor. If there is no
successor or not one willing and able to serve, the court will appoint an
Administrator c.t.a. (an Administrator with the will annexed).
If there is no will
If the decedent left no will, (or the decedent left a will but the named Executors
cannot serve), then an administrator must be appointed.
Who is entitled to be an administrator?
Pennsylvania law lists the persons who are entitled to be an administrator. The
adminstrator is appointed by the Register of Wills in order of priority given in the
list except “for good cause shown”:
(1) Those entitled to the residuary estate under the will. (If all of the named
Executors are unavailable an administrator is appointed. The following categories
apply where there is no will.)
(2) The surviving spouse.
(3) Those entitled to inherit the decedent’s estate under the intestate law as the
register, in his discretion, thinks will best administer the estate, giving preference,
however, according to the sizes of the shares of those in this class.
(4) The principal creditors of the decedent at the time of his death.
(5) Other fit persons.
Who is in charge?

7
(6) If all of the foregoing shall renounce his right to letters of administration, the
register, in his discretion, may appoint a nominee of the person so renouncing in
preference to the persons set forth in any succeeding paragraph.
NOTE: Some of Pennsylvania’s statutes refer to a Personal Representative which
can be either an Executor or Administrator. As used in this book, the term
“Executor” also includes an Administrator and a Personal Representative.

8
Role of Lawyer
The lawyer for the estate represents the Executor, not the beneficiaries. The
scope of the representation is as agreed between the Executor and the lawyer
and should be in a written agreement which also includes the means of computing
the fee. Some Executors wish to do much of the work themselves, while some
Executors want to delegate as much as they can to a professional.
Some lawyers charge by a “fee schedule” and take a percentage of the value
of the estate as their fee – as much as five percent. The bigger the estate, the
bigger the fee. I do not think this is appropriate as the amount of work involved
is not in proportion to how big the numbers are, but rather on what problems,
complexities, and difficulties are encountered. I recommend an hourly fee which
compensates the professional for the amount of work done.
The lawyer will advise the Executor of necessary steps and deadlines, help to
resolve disputes and difficulties with beneficiaries, and protects the Executor
from liability. The lawyer also prepares tax returns, gives advice on available tax
elections, and prepares an accounting of the Executor’s actions which is needed to
close the estate. Usually the Executor hires a lawyer to represent the Executor in
the estate settlement. The lawyer’s fee is paid from the estate.
You don’t have to use the lawyer who drafted the will
Usually the Executor hires a lawyer and possibly an accountant to help with the
estate settlement. Sometimes the lawyer who drafted the will holds the original
will for safe-keeping. That means the Executor has to get the will from that
lawyer. Sometimes the lawyer who held the will assumes he will be hired to be
the attorney for the estate. That may be appropriate but is not required. The
Do you need a lawyer?

9
choice of an attorney is up to the Executor. Like any other professional service,
there are many choices, approaches and fee levels available. The Executor would
be wise to check around, ask friends who have been Executors who they worked
with, meet with prospective attorneys and make an informed decision. The right
attorney can save a lot of money, not only in fees, but in tax saving strategies and
in efficiencies, especially with the use of technology for estate settlement.

10
The Executor becomes the actual owner of the decedent’s personal estate. During
the period of estate administration, the property belongs to the Executor. The
Executor is responsible for gathering and taking possession of all of the decedent’s
property and safeguarding it. If grandma passed away and bequeathed her sterling
flatware to you in her will, you are not entitled to the silver until the Executor
distributes it to you. When grandmother dies, the Executor becomes the owner of
the silver. The Executor will not be in a position to distribute the silver to you until
he or she determines what claims there are against the estate. Creditors’ claims
and taxes must be paid first. It is always possible that property, including the
sterling, would have to be sold to meet estate obligations. If you take the sterling
out of the house, whether it was given to you in the will or not, you are stealing.
The Executor must value all the assets
For things other than bank accounts and marketable securities, this means getting
appraisals. After determining that the estate is solvent, the Executor must pay the
decedent’s debts, expenses of the last illness, funeral expenses, and taxes. Anyone
who has a claim against the estate has one year from the date of the publication
of the estate notice in the newspaper to come forward. For a period of one year,
then, the Executor could receive bills or claims against the estate’s assets.
The Executor must file and pay all taxes
The decedent’s final federal 1040 and state income tax returns must be filed by
the Executor. The Executor must review prior returns to make sure they were filed,
and filed correctly. Keep in mind that the IRS is not barred by the one-year claims
period to come back to the estate looking for unpaid income taxes. The Executor
is also responsible for filing federal estate taxes, state inheritance or estate taxes,
What does an Executor do?

11
and federal and state income tax returns for the estate. If there is property that
is included in the taxable estate but does not pass under the will (such as life
insurance, pension benefits, or joint property), the Executor must also value these
assets, report them to the tax authorities and pay the tax attributable to them.
In some cases the Executor must collect taxes due from the recipients of this
property.
There are various tax elections and planning techniques which may save money for
the estate. To mention a few, tax savings could come from disclaimers, the choice
of a fiscal year for the estate other than the calendar year, making elections
regarding the deductibility of administration expenses, making elections regarding
the taxation of Series E Bond interest, election of marital deduction treatment,
valuing real estate as “special use” property, and electing the installment payment
of estate taxes. Obviously, a lay person acting as an Executor cannot be expected
to know about all these strategies and will need competent advice to make the
appropriate decisions. Also it is obvious that the matter of income, estate and
inheritance taxes for the estate are going to take time.
Death taxes, both state and federal, must be paid within nine months from the
date of death unless the estate can qualify for an extension. Often the actual tax is
paid at the nine month date but the tax returns themselves are put on extension.
Extensions are available for 6 months, which would make the return filing 15
months after the date of death.
Unlike 1040’s, every single death tax return is looked at by IRS or Pennsylvania
Department of Revenue personnel. The taxes are not settled until the taxing
authority affirmatively accepts the return and the tax and communicates this to
the Executor in an appraisement letter.
During the period of administration, the Executor must preserve the value of the
estate and administer it for the benefit of the beneficiaries. The Executor collects
income from investments, business interests, and real estate. The collected assets

12
must be invested prudently and, in many cases, estate assets must be sold. These
sales are handled by the Executor. The Executor accounts for all transactions and
when all creditors have been satisfied and all taxes paid, distributes the estate to
the beneficiaries in accordance with the terms of the will.
An Executor is entitled to a fee for the very substantial work and responsibility
involved. The amount of the fee will depend on the amount of work performed.
Sometimes an individual Executor will do a tremendous amount of work, and
sometimes she will hire professionals who will do almost all of the work. Being an
Executor is a job. It carries a lot of responsibility and takes time.
Can the person you named as Executor handle the task?

13
Uncle Bill named you as the Executor of his will. At first you were touched, even
honored. He must have had a lot of confidence in you. You always liked Uncle
Bill. Let’s read his will. He leaves his estate to 25 different beneficiaries including
friends, nieces, nephews, and charities.
What kind of trouble can you get in to being his Executor? Lots.
First, you need to protect the assets of the estate. As the Executor, you are a
fiduciary. You are charged with protecting the property of the beneficiaries - one
of the highest duties known to the law. It is your responsibility to make sure the
assets are preserved, safeguarded, and protected.
Not only do you owe a duty to beneficiaries, you also owe duties to creditors of
the deceased and the taxing authorities. You must publish notice to creditors of
the death of the deceased so that they can come forward with claims. There is a
short statute of limitations that applies to estates. Creditors have one year after
notice to come forward. (Except the taxing authorities - their claims period is
not shortened to the one year.) You also have a duty to have all assets valued or
appraised and make returns of the tax due to the federal and state government.
If you fail to pay a creditor, you can be personally liable for the payment of
the debt. As Executor you will be pressured by the beneficiaries to make early
distributions. If you give in to the pressure and distribute estate assets early, and
claims again the estate arise after you have distributed estate assets; you, the
Executor are personally liable to pay those creditors. Early distributions like this
are called “risk distributions” for this reason.
Similarly, if you distribute estate assets without making appropriate tax payments
or establishing sufficient reserves for taxes, you are personally liable for any
unpaid tax. That includes the decedent’s income tax as well as estate and
Personal Liability

14
inheritance taxes. If Uncle Bill hasn’t been paying income tax or has been filing
inaccurate returns, it is your responsibility to correct the matter.
You can expect all your actions as Executor to be keenly watched by the
beneficiaries. If you pay too much for an appraisal, a beneficiary may criticize you.
If the beneficiaries are right - let’s say you pay $1,000 for an appraisal that could
have been done for $100; you, the Executor, are personally liable for the difference
if you breached your fiduciary duty. The court is the arbiter that determines if you
breached your duty in this instance.
If you divide up jewelry and household furnishings for distribution, some
beneficiaries may say it was not done fairly and equitably. If you sell the household
furnishings, some will say you didn’t get enough for them, or that it wasn’t fair to
make them buy things. Let’s face it. You can’t please all of the people all of the
time. You need a thick skin to be an Executor.
Let’s say Uncle Bill had a stock portfolio that included World Com. In general, an
Executor should liquidate all securities as soon as possible to remove the risk of
loss for the period of administration. If the Executor doesn’t sell the securities, the
Executor could be personally liable for the decline in value of the stock unless the
beneficiaries have specifically requested that the securities be retained and release
the Executor from any liability. Remember, it is the Executor’s duty to preserve
value, not make investment decisions for the long run.
Let’s say Uncle Bill had a house and it took a while to sell. Maybe the Executor had
a hard time deciding whether the house should be sold or distributed in kind to
beneficiaries, or maybe it was just on the market a long time before a buyer came
along. Was the house insured? Is Uncle Bill’s homeowners insurance in effect if the
home isn’t occupied? Have you taken steps to make sure there is fire insurance?
Uncle Bill had a car. One of his nieces needs a car to drive to school and you let
her drive the car. She is in an accident. The estate, and therefore you, are liable.
You, after all, are the owner of the car until it is distributed.

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Executor’s Checklist
While not exhaustive, this list is reasonably complete. The list may include
steps that do not apply to many estates. On the other hand, some unusual
assets will require additional steps. Closely-held businesses are a good
example where additional steps may be required to fulfill the terms of buy-
sell agreements and partnership agreements.

16
1. Secure the Decedent’s Property
a. Real Estate
If there is a surviving spouse living in the house and perhaps a joint owner with
the decedent, this is not a concern. Consider changing the locks on any real
estate owned by the decedent. Many people may have keys. It is not unusual for
household furnishings, jewelry, and other personal possessions to turn up missing.
For some reason, many people feel that they are entitled to take things from
the decedent’s home after death – most of them do not realize they are doing
anything wrong, but it is the Executor’s duty to protect and preserve the property
and its value for the beneficiaries. Of course, all of these things are subject to
Pennsylvania inheritance tax too.
Notify the property insurer of the death. Determine how long the coverage will
remain in effect and make arrangements to buy other insurance for liability and
fire if necessary. If the house burns down and the Executor did not act prudently in
securing it and insuring it, the Executor can be personally liable.
b. Collections, Art, Silver, Guns, Valuables
Unfortunately, in many cases, the decedent’s personal property “walks away” or
“disappears.” Many folks don’t understand that they have to wait for distribution
of items from the Executor. Or they may feel that Uncle Jack wanted them to have
the clock, so they just took it home with them after he died. In many of these
cases, although it is technically theft, the people involved don’t realize they are
doing anything wrong. Some of these items can be very valuable. The Executor
must act promptly to protect, secure, and insure these items.
Things To Do ASAP

17
c. Online Access to Accounts
Watching a decedent’s mail box for statements, invoices, and renewals no longer
works to gather all assets. Many of these items are solely on a computer, external
storage device like a hard drive or thumb drive, or in the cloud. Nearly everyone
today has digital assets and Executors are often prevented from having access to
these assets by password protection and restrictive terms of service.
The personal representative is responsible for the decedent’s digital assets. “Digital
assets” is a very broad term that includes information stored on a decedent’s
computer or external drive, content uploaded onto websites, and rights in digital
property. Common examples of digital assets are e-mail, documents, photographs,
videos, books, a blog, social media accounts, applications, cryptocurrencies, and
web domain names, just to name a few. Gaining access to a decedent’s digital
assets can often be a daunting task. First, the Executor has to come up with the
decedent’s passwords. Even if the Executor finds the passwords, he or she should
think carefully before using them. Doing so may violate federal and state privacy
and computer hacking laws. Many digital assets are subject to terms of service
agreements (“TOSA”) entered into by the decedent. Most people just click through
these agreements and have no idea what they provide on the death of an account
holder. For example, Facebook’s terms of service prohibit the use of another user’s
login credentials, even with permission from that user.
Another issue is ownership. Sometimes the decedent does not actually own a
digital asset but has a license to use it for life, and sometimes digital assets are
in the decedent’s possession but are actually owned by their former employer.
For this reason, it is likely that books, movies, music, etc. may not be able to be
transferred – unlike physical versions.
2. Apply for a Tax Identification Number (“TIN”) for the estate
3. Open an estate checking account
4. Set up your accounting system for estate transactions

18
5. Give required notices to beneficiaries
6. Notify Department of Health and Human services if decedent
was over age 55
7. Advertise the grant of letters in two newspapers as directed
8. File Certificate of Notice
9. Notice to Social Security Administration
a. Usually handled by funeral director
b. Apply for death benefit
c. Surviving spouse’s benefit may change
d. Apply for benefits available for children
10. Take custody and control of all estate assets
a. Register all securities and investment accounts in the name of the estate
b. Find and safeguard all business interests, valuables, personal property,
important papers, the residence, vacation homes, and other properties
11. Determine whether or not the estate is likely to be insolvent
Before paying any bills other than the funeral, before distributing any property,
applying for death benefits or making payments to beneficiaries, determine with
the help of counsel whether or not the estate is likely to be insolvent.
If the estate is insolvent there is a strict statutory priority for the payment of
claims. In the case of insolvency you should pay nothing (other than the cost of
a reasonable funeral) from the estate until you have waited until all claims, bills,
and demands are in. This will be at least one whole year after the first complete
advertisement.
This is a very difficult thing for many Executors. The Executor may be scrupulous
about paying bills when handling his or her own finances and it goes against
the grain to let bills go unpaid and receive dunning calls and notices from the
decedent’s creditors. Explain to any creditors that the estate is insolvent and you

19
must wait for all claims to be in and then determine under the Pennsylvania priority
statute which ones get paid first. It is very similarly to bankruptcy. If the Executor
pays bills that are not entitled to priority so that priority creditors don’t get paid,
the Executor is personally liable to pay the priority creditor. That means the
Executor has to reach into his own pocket to make up the amount he improperly
paid to the wrong creditor.
12. Check for escheated property. Property that is abandoned has to be
turned over to the state.
13. Forward mail, stop deliveries and request refunds for subscriptions
14. Liquidate estate assets promptly or obtain beneficiary consents to
retention of assets for distribution in kind

20
15. Make pre-payment of Pennsylvania inheritance tax to obtain 5%
discount
The Pennsylvania Inheritance Tax is due nine months from the date of the
decedent’s death. No tax is due on assets passing on account of death to a
surviving spouse or to a charity. For assets passing to lineal descendants (children,
grandchildren, etc.) and ascendants (parents, grandparents) the rate is 4.5% of the
date of death value. For assets passing to siblings the rate is 12%. Assets passing
to anyone else whether they be cousins, nieces, nephews, friends, partners, the
rate is 15%.
If you estimate the total tax at $50,000, a 5% discount would be $2,500. Pay
$47,500 within three months of death and it will count as if you paid $50,000. The
return need not be filed at this point. This is only an estimate.
Note: 5% for six months is 10% per annum.
16. Inventory safe deposit box
17. Make claim for life insurance benefits - obtain Form 712 from each
insurance company
18. Make claim for pensions and profit-sharing benefits from decedent’s
employer – but only after consulting estate tax counsel
This is a very complex area and the income tax consequences to the estate and
beneficiaries can be huge.
a. Consider mode of payment
b. Obtain copies of plan, IRS approval, and beneficiary designation
Within Three Months
OF DATE OF DEATH

21
19. Apply for lump sum Social Security benefit or VA benefit from local
Social Security Administration or local VA office; notify payors of death
20. File Form 56 - Notice of Fiduciary Relationship with the IRS
21. Write to all local banks for date of death value of any accounts held
by decedent and how accounts were titled
22. Value securities
23. Obtain appraisal of real property and personal property from
qualified appraiser
24. Obtain last three years of federal and state income tax returns and
last three years of cancelled checks
25. Obtain 5 years of financial records and statements on business
interest plus all relevant agreements
26. Obtain copies of all US Gift Tax Returns filed by decedent
27. Obtain evidence of all debts of decedent and costs of administering
estate
28. Ascertain if any of decedent’s medical expenses were unpaid at
death
29. Ascertain if the estate received any taxable income under Section
691 of the Internal Revenue Code
30. Consider requesting prompt assessment of decedent’s U.S. income
taxes
31. File final U.S. and state individual tax returns (IRS Form 1040)–due
April 15 of the year after the year in which death occurs–and gift tax
returns–due by time estate-tax return is due
32. Decide if ancillary (out-of-state) administration is necessary
33. Decide if administration expenses and losses should be claimed as an

22
income-tax or estate-tax deduction
34. Obtain alternate-valuation-date values for federal estate-tax return
35. Pay U.S. estate tax with flower bonds held at death, if any
36. Consider election of extension of time to pay U.S. estate tax (Section
6161 or 6166)–must be filed on or before due date of U.S. estate tax
returns, including extensions
37. Consider election to defer payment of inheritance tax on remainder
interests–where permitted, determine deadline for election
38. Consider election for special valuation of farm or business real
estate under IRC Section 2032A–must be made with timely filed U.S.
estate-tax return
39. Elect (or do not elect) to qualify certain terminable interest property
(QTIP) for marital deduction
40. Elect (or do not elect) QDT (qualified domestic trust) treatment if
spouse is not a U.S. citizen
41. Maximize GST (generation-skipping tax) exemptions by making
election or redistribute trust assets
42. Determine the necessity for election on excess retirement
accumulations
43. Ascertain if credit for tax paid on prior transfers is allowable to
reduce tax here
44. Deadline for spousal election against the will
Within Six Months
OF DATE OF DEATH

23
45. File inheritance tax and federal estate tax returns - both due within
nine months of death OR request extensions
46. Deadline for disclaimers
47. File inventory–check state law for requirements and due date
48. Consider requesting prompt assessment of U.S. income-tax return
49. File U.S. Fiduciary Income Tax Return (Form 1041)–choice of fiscal year
50. Consider redemption under IRC Section 303
Within Nine Months
OF DATE OF DEATH
51. Prepare Account and informal family agreement, receipts and
releases
OR
52. File Account and prepare audit notices and statement of proposed
distribution
53. File schedule of distribution if applicable
54. Appear at audit
55. Make distribution pursuant to receipt and release agreements or
distribution order
After One Year
FROM DATE OF FIRST COMPLETE ADVERTISEMENT OF PROBATE

24
The use of the Internet or the complimentary phone consultation for communication with the firm or any individual member of the firm does not
establish an attorney-client relationship.
SpencerLawFirm.com
Copyright “Patti Spencer” 2018
All rights reserved. No part of this publication may be
reproduced or redistributed in any form without
the prior written permission of the publishers
Contact Patti
T: 717-394-1131
E: info@spencerlawfirm.com
320 Race Ave
Lancaster, PA 17603
Spencer Law Firm LLC
www.spencerlawfirm.com

How to be an Executor in Pennsylvania | Patti Spencer

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