Estate Taxes

Pennsylvania - My aunt died last November, leaving a will and cast her deceased husband's nephew as her executor. To make a long story short, he has been VERY lax in dealing with this whole thing. He never provided us with copies of the will, told us what percentage we were to get, but hasn't divulged any info on what the estate is worth. To make matters worse, he placed her house up for sale and left the state for a 5 month vacation. We just found out completely by accident, that he was up in March for the closing of the house, and then he left again, not informing anyone. Finally a family member tracked him down and he explained that the house had only sold for $177,000 after "repairs". He went on to say that $50,000 was going right to taxes, and that he was paying his lawyer $200 an hour to go over each person's portion, and decide what tax to pay out individually. The kicker here is that the lawyer is a very close friend of his. Makes me wonder what type of friend charges $200 an hour for this.

Is he allowed to pay taxes out of our portions when he has already paid estate taxes? I live in New Jersey, and am perfectly capable of managing my own money. Also, do I have a case at trying to have the court make him pony up more info? For all any of us know, he has more money in the estate than he is saying, as his family gets 30% of the estate as well, not including whatever fees he decides to pay himself. I just find the whole matter frustrating and it just acts as a painful reminder that my aunt is gone every time I have to deal with this man.

Check at the county courthouse/probate court to see if the will has been filed and the probate opened for this estate (this is normally supposed to be done within 30 days after the death). If it has been, you can get a copy of it. If the will hasn't been filed, he has no official, legal authority to act as executor.

He should have given the beneficiaries a copy of the will.

Estates are normally settled within 6-8 months, so he could still honestly claim that he is managing estate affairs, but you need to speak to a local probate attorney to find out what you can do to get him to file the will or if there is something else you should be doing. If I were you I would hire a probate attorney to be executor or do it myself, and then he would be forced to submit the will to the court and possibly apply to be the replacement executor instead of you, but at least you could then ask the judge to subpoena this person to submit information about the assets, and you would at least have the benefit of getting things started.

Executor fees in Pennsylvania are not specific, defined in the law as "reasonable compensation", so you would need to speak to a local attorney to find out what the rate is--probably something less than 6% of the total value of the estate.

He is NOT allowed to pay taxes out of your portions of the inheritance. Taxes are supposed to be paid out of the estate account before the rest of the account is divided up amongst the heirs. So if possible, you need to attend the probate hearings or get your attorney to attend on your behalf so you can find out how the estate financial calculations are being made--if this incorrect tax aspect is being done, then you need to make your protest known to the judge so it can be stopped and corrected.

The $200 hourly fee is exorbitant, but the executor does have a certain amount of authority to make expenditures and can hire expert help--however, since those specific services about tax computation are not needed since that step is improper, if this expense is made you need to protest it so that the fee can be refunded, but I don't know how much good it would do to protest since it might be approved.

If you wanted to pay for an independent appraisal of the house, then that would give you a truer idea of it's real value.

DANDY DON