Is it normal for lawyer/title agent to hold back inheritance but never pay the state the money?: Sold passed sisters house. $20,000 was held back for inheritance tax almost 3 months ago by title agent/ lawyer. They never sent check to state and I was never given a check. State contacted me recently that the money was never paid. Owe around $19,000. Lawyer/title agent only talks through real estate agent never directly with me(I’ve tried, no direct responses). Was told I would be sent the check to bring to wills office because they could not send it there directly (found this odd). Never got check that was supposedly overnighted to me. Would not provide me with tracking. I was also told I couldn’t be given the difference of the check and I would be responsible for all late fees by the state. I am confused. I paid these people extra to handle all this (shown on my Alta as bookkeeping). I am elderly and the real estate agent was a family friend and the lawyer is the real estate agents friend. Am I being taken advantage of? Also the real estate agent was also the broker. She made $6,000 from the sale of house and charged me a $6,000 broker fee. Plus I believed I was way over charged on other things. I have been told that this is not normal. Do I need to get my own lawyer?
Steven’s answer: The usual method is for you to file a PA inheritance tax return first and pay the actual taxes owed. Once PA issues a Notice of Appraisement that hopefully accepts the return as filed, you can then submit that Notice of Appraisement to the title company. They will then release the escrow money to the estate.
Activating Durable Health Care Power of Attorney?:
While I have initial Durable Health Care Power of Attorney for my mother (talking to doctors, getting information, etc.), my remaining authority only takes effect "when and only when I lack the ability to understand, make or communicate a choice regarding a health or personal care decision as verified by my attending physician".
When I asked her "attending physician" back in June if she could make this statement, she said that she would have to administer a test. We held off on that and, in September, I asked her to administer the test and my mother failed. When I asked her again if she could now make the statement, she then proceeds to tell me that a psychoneurologist would have to make the statement.
Long story short, Adult Protective Services got involved and sent their own psychoneurologist who declared her "an incapacitated person".
Is this sufficient to activate the remaining authority?
Steven’s answer: It would appear that this would be sufficient to trigger the springing Durable Power. However, you must get an estates attorney to review the document and the reports to see if this is in fact the case.
In order to cash my Mother's IRA of $5300, they are requiring a short certificate and an EIN?: How much should that cost if that is the only thing I need it for to settle her estate.
Steven’s answer:
The answers by Attorneys Masiuk and Rabin offer comprehensive and sound advice. The only thing to add is that another reason that this amount is payable to the estate would be where mom failed to name a beneficiary or the beneficiary she named predeceased her.
The other point here to keep in mind is the tax implications. If the estate receives the distribution from the IRA, you may want to distribute this money net of administration and other deductible expenses, to you in the same year as the receipt by the trust of this distribution since the estate's marginal income tax brackets are much higher in most cases than the individual tax brackets. Make sure any estates attorney you hire understand the income tax implications of this situation and that they know how to plan for and prepare a Form 1041 and PA 41.