Pennsylvania

Pennsylvania splits the job between two offices. The Register of Wills — an elected
official in each county — probates the will and issues letters testamentary. The
Orphans' Court Division of the Court of Common Pleas handles anything contested:
disputes, accountings, and distribution questions. Routine estates never see a judge.

Pennsylvania inheritance tax is the main event

Most states with a death tax charge the estate. Pennsylvania charges the beneficiary, at
a rate that depends on their relationship to the deceased:

Charities and certain exempt institutions pay nothing. Confirm current rates with the
Department of Revenue before relying on them.

The five per cent discount is easy to miss

Pay the inheritance tax within three months of the date of death and Pennsylvania allows
a 5% discount on the amount paid — even before the return is filed, using an estimate.
Three months is short, and the discount is real money. It is the single most common
avoidable loss in a Pennsylvania estate.

It reaches beyond probate

The tax is not limited to assets passing under the will. Jointly held property and
accounts payable on death are commonly caught as well. Check the scope before assuming a
non-probate asset escapes it.

Before distributing

File the inheritance tax return, settle the tax, and give creditors their statutory period.
Distributing early leaves the personal representative exposed for the tax.

Pennsylvania has the most relaxed execution requirements of any state covered here, and it
surprises people who have made a will somewhere else.

No witnesses are required at signing

If the testator signs the will personally at the end, Pennsylvania requires no
witnesses to be present. Witnesses are needed later, at the Register of Wills, to prove the
signature — two people who can attest to the testator's handwriting, or a self-proving
affidavit prepared in advance.

Where the testator cannot sign and instead makes a mark, or directs someone else to sign
for them, two witnesses must sign in the testator's presence. So the witness requirement
depends entirely on how the will was signed.

The practical consequence: a handwritten, unwitnessed will signed by the testator can be
valid in Pennsylvania. That does not make it a good idea — proving it later is harder, and
everything else a homemade will gets wrong still applies.

Use a self-proving affidavit anyway

It converts "find two people who recognise the handwriting, years later" into a document
already on file. For the cost of a notary, take it.

Plan around the inheritance tax

Pennsylvania's rates turn on relationship — 4.5% to a child, 12% to a sibling, 15% to a
friend, nephew, niece or unmarried partner. Who you leave things to changes what they
actually receive by a wide margin. This is worth an explicit conversation when drafting,
particularly for unmarried couples, who are taxed at the highest rate.

Also

• Name an alternate executor, and consider expressly setting their compensation.
• A surviving spouse has an elective share whatever the will says.
• Review after a marriage, divorce, birth or a move into Pennsylvania.

Yes. A Pennsylvania executor is entitled to compensation that is "reasonable and just"
under 20 Pa.C.S. § 3537. There is no statutory tariff.

The Johnson Estate schedule

In practice almost every Pennsylvania estate starts from the graduated schedule set out in
Johnson Estate, a 1983 Orphans' Court decision: broadly 5% on the first $100,000, then
4%, 3% and 2% on successive tranches as the estate grows.

Two things to hold in mind. It is a 1983 benchmark, not a statute, and no court is bound
by it. And it is routinely accepted precisely because it is conventional — an executor who
takes the Johnson figure on an ordinary estate rarely faces an objection, while one who
departs from it should be ready to justify the departure.

How it is approved

Either all the beneficiaries agree in writing, or the Orphans' Court approves it on a
formal accounting. Settle it in writing before taking it.

The tax point that changes the answer

Executor's commission is a deductible administration expense for Pennsylvania inheritance
tax, but it is taxable income to the executor. Where the executor is also the sole or main
beneficiary — often a child, taxed at 4.5% — taking the commission converts a 4.5%-taxed
inheritance into income taxed at their marginal federal and state rate. That is frequently
a losing trade. Many Pennsylvania family executors waive the fee for exactly this reason.
Run the numbers with an accountant before deciding; this is the one state on this list where
the arithmetic most often argues against taking a fee.

If the will sets the figure

The will governs, provided the executor accepts on those terms.

A Pennsylvania executor is reimbursed from the estate for the reasonable expenses of
administration, separately from the commission. Most of these are also deductible against
the inheritance tax, which makes recording them worth real money rather than just tidy.

Normally claimable — and generally deductible

• Funeral, burial or cremation, the headstone, and a reasonable reception.
• Register of Wills filing fees, short certificates, certified death certificates,
  advertising the grant of letters in a newspaper and the county legal journal.
• Attorney's fees, accountant's fees, and preparation of the final Form 1040, any Form 1041,
  and the PA inheritance tax return.
• Appraisals of real property, vehicles, farm equipment, jewellery and collections.
• Carrying costs on estate property until sale: insurance, property tax, utilities, security,
  maintenance, lawn care and snow removal.
• Cleaning, clearing, storing, moving and shipping contents.
• Travel on estate business at a reasonable rate.
• Bond premiums where a bond is required.

Normally not claimable

• The executor's lost wages, meals near home, or personal spending.
• Costs run up for one beneficiary's convenience rather than the estate's.
• Improvements beyond preparing a property for sale as it stands.
• Anything without a receipt.

The rule that decides it

Open an estate bank account and run everything through it. In Pennsylvania there is an
extra incentive to be meticulous: every properly documented administration expense reduces
the inheritance tax base, so a receipt you fail to keep is taxed at 4.5%, 12% or 15%
depending on who inherits. Sloppy record-keeping here has a price you can calculate.

Most Pennsylvania estates are administered by a family member with a lawyer's help, and the
Register of Wills system makes routine estates genuinely straightforward.

Consider a professional when

• The estate holds an operating business, a farm, or a portfolio of rental property.
  Family businesses are common in Pennsylvania and the family exemption and business
  relief provisions for inheritance tax reward getting the structure right.
• There is conflict among the beneficiaries, or a will challenge looks likely — that puts
  the estate in front of the Orphans' Court, where a professional is on home ground.
• A beneficiary is a minor or incapacitated, so a trust runs for years.
• The named executor lives out of state, and cannot easily attend the county Register of
  Wills or deal with a property in person.
• The inheritance tax picture is complicated — an unmarried partner taxed at 15%, siblings at
  12%, or substantial non-probate assets that are nonetheless caught by the tax.

What it costs

Corporate fiduciaries charge a negotiated percentage, typically referenced to the Johnson
Estate schedule, often with a minimum annual fee. Attorneys generally bill hourly for estate
work. Ask for either in writing.

Middle ground

Appoint a family member and let them retain a probate attorney and an accountant at the
estate's expense. Given the three-month inheritance tax discount, engaging the accountant
in the first fortnight rather than the third month can pay for a meaningful share of their
own fee.

An executor who does not want the role can renounce before taking out letters. Once they
have qualified and begun acting, stepping down needs the court's involvement.