Inheritance Tax question

[Shelby6718]

What is the name of your state (only U.S. law)? Pa

My mother, who recently passed, left a will . Her estate is small, perhaps twenty to thirty thousand dollars in cash and assets. My brother is executor and has an attorney handling the probate. However, there is also real estate owned by my brother and mother as Jt Ten WROS.

He is of the opinion that the inheritance tax due on the joint ten. property will he paid by the estate while I believe the joint property is not part of the estate and he is individually responsible for the tax. Which, if either, is correct?

Shelby

 

[anteater]

Did her will contain any provisions regarding payment of the inheritance tax?

 

[LdiJ]

What is the name of your state (only U.S. law)? Pa

My mother, who recently passed, left a will . Her estate is small, perhaps twenty to thirty thousand dollars in cash and assets. My brother is executor and has an attorney handling the probate. However, there is also real estate owned by my brother and mother as Jt Ten WROS.

He is of the opinion that the inheritance tax due on the joint ten. property will he paid by the estate while I believe the joint property is not part of the estate and he is individually responsible for the tax. Which, if either, is correct?

Shelby

The house passes to him outside of the estate. Therefore, in my opinion the inheritance taxes on the house are his problem, not the estate's problem.

 

[tranquility]

The house passes to him outside of the estate. Therefore, in my opinion the inheritance taxes on the house are his problem, not the estate's problem.

I agree as long as the estate does not handle it per the will:

An individual who received property by right of survivorship or a transfer is responsible for filing a return if the property was not reported by the personal representative.

http://www.alleghenycounty.us/wo/tax.aspx

 

[anteater]

I tentatively agree in that liability generally runs to the transferee. However, that could be altered or overridden by a tax clause in the will.

 

[Shelby6718]

I tentatively agree in that liability generally runs to the transferee. However, that could be altered or overridden by a tax clause in the will.

I haven't received my copy of the will yet so I cannot be sure if there is anything in it to cover tax liability on the property. If there is not and the liability is my brothers alone, my next question on this matter is:

His attorney is charging a percentage of the value of the estate to handle it. Should the valuation of the joint real property be included in the total estate value that his percentage is calculated on or should that be a separate matter with his fee being my brothers individual responsibility?

S

 

[anteater]

At the end of the day, this may be a situation where you may have to duke it out with your brother. (I will say that agreeing to compensate the attorney on a percentage basis for an uncomplicated probate is often not the best way to go. Unless the personal representative is just going to be a figurehead and the attorney is going to do all the work. In which case, the personal representative would be exhibiting a lot of chutzpah in taking compensation.)

There isn't anything statutory regarding attorney fees. Generally, it is up to the court to determine what is reasonable.

While the PA Supreme Court has stated the probate court's sole reliance on some fee schedule isn't kosher, it did not go so far as to say that the judges shall not keep a hip pocket fee schedule to use as a "rule of thumb" in a first glance at determining reasonability.

And the fee schedule that slipped out during a fee dispute case does provide for inclusion of non-probate assets in the calculation of attorney fees. Here is a brief summary on PR compensation and attorney fees:

http://evans-legal.com/dan/estfees.html