Legal Question in Wills and Trusts in Pennsylvania
Executor's control over a spouse's property
I am the executor for my mother's estate. One of the items in her possession is a stamp collection that belonged to my father, who passed away in 1984. My father died without a will, and no administration of his estate occurred through any court (Bucks County, PA). My mother has retained this property in her possession to the time of her death. The value of this collection is unknown, but has an estimated minimal value of $3,000.
My mother died recently with a will, leaving all possessions equally among her children. Letters have been granted by the county courthouse authorizing me to act as executor.
Do I, as executor, include this collection in the estate of my mother? Put another way, is this stamp collection wholly owned by my mother? I am trying to determine my legal capacity regarding this collection in the administration of my mother's estate. Only one of seven beneficiaries (myself) has indicated an interest in retaining this property.
Also, are there legal implications from not having reported this collection upon the death of my father. (Total estate value at the time of my father's death, excluding this collection, was less than $100,000).
Thank You.
Dave
1 Answer from Attorneys
Re: Executor's control over a spouse's property
Assuming that your parents owned all of their assets jointly, then the stamp collection would have automatically passed to your Mother upon your Father�s death. Therefore, in all likelihood, she owned 100% of the stamp collection at the time of her death and, as the Executor, you would have a duty to report the collection on the Estate Inventory and on the Pennsylvania Inheritance Tax Return. The current inheritance tax rate for transfers to children is 4.5%. If your Mother�s total estate was less that $1 million (for 2003) and she had not made any gifts exceeding the annual gift tax exclusion during her lifetime, then no Federal Estate Tax Return would need to be filed.
You should keep in mind that if the stamp collection increases in value, then some capital gains tax may be due if the collection is eventually sold. The beneficiary who gets the collection will receive a �tax basis� in the collection that is equal to the value of the collection as of your Mother�s date of death. For instance, if you report on the Estate Inventory and PA Inheritance Tax Return that the value of the collection was $3,000, but then your brother eventually sells the collection for $10,000, then your brother would owe capital gains tax on the $7,000 difference. Additionally, if you give the collection to one sibling and then adjust the other shares, then the value of the collection will be very important.
Our main office is in Media, PA, but I also work from my home office in Levittown, PA. Should you need further assistance in administering you Mother�s estate or preparing the final income and inheritance tax returns, please feel free to contact me.
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