From our “Ask a Question” Mailbag: Can a Statute of Limitations Impact My Estate in PA?

Most Recently Updated July 9, 2018

“Is there a Statute of Limitations on Estate Planning in Philadelphia?”

Can a Statute of Limitations Impact My Estate in PA?

Can a Statute of Limitations Impact My Estate in PA?

A Statute of Limitations serves as a cut-off date. The date is context specific and begins tolling on the date your claim originated. For instance, if you sign a contract, the date the party fails to perform is the start date for tolling period. Once the statutorily provided time has elapsed, the statute of limitations has “run”. After the period has run, except in unusual cases, a Court in Pennsylvania will not hear the merits of your case.

How can a Statute of Limitations impact my estate?

Executors often ask statute of limitation questions when the deceased has made a loan or advancement to a beneficiary. In some circumstances, the result can bar repayment in others; no statute of limitations is applicable.

When discussing technical legal matters, the facts of a real case can illuminate the issue and provide better understanding. The Orphans Court Division of the Court of Common Pleas of Philadelphia County recently analyzed a similar statue of limitations issue.

Real World Example

Let’s examine the facts from the Charchidi Estate case. This case involved four brothers. One of the brothers (Joseph) has a substantial amount of money and no other family. Thirteen years before his death, Joseph loaned a substantial amount of money to his brother Anthony. Joseph never formally documented the loan, and there was no mention of the loan in his Will. Joseph Charchidi unambiguously left his entire estate to be divided equally in thirds among his three brothers.

After Joseph’s death, the executors sought to reduce Anthony’s share by the amount of the loan claiming the loan was an advance on his share of the estate. Anthony disagreed and claimed the 13-year-old loan was barred by a statute of limitations. In Pennsylvania, the statute of limitations on oral contracts is 4 years from the date of breach. [42 Pa. C.S. § 5525(a)(3)&(4)]

Arguments and the Court’s Decision

The executors advanced strong arguments available to revive claims barred by this Statute of Limitations such as the Pennsylvania Acknowledgement Doctrine. This doctrine can potentially revive time barred claims if the debtor unequivocally acknowledges promises to pay a preexisting debt. There was not sufficient evidence in this case to show Anthony acknowledged his obligation to repay the loan.

Ultimately, the failure of Joseph to document the loan properly by developing a repayment schedule or revising his will to account for the advancement cost his estate a significant amount of money – and created litigation for his executors.

Last Minute Thoughts

Whether you owe or are owed money, strategies exist to revive your claim or ensure it is barred by the Statute of Limitations. Unfortunately for most people, they discover this after it is too late. Before taking action to collect an unpaid debt of the estate or negotiating to pay a debt understanding the implications of the Pennsylvania statutes of limitations is necessary.

More Planning Questions?

Knowing the law is only a piece of the Estate Planning process. By all means, if you want to learn more, please read my more detailed article, Estate Planning Everything You Need to Know.

In Conclusion: Can a Statute of Limitations Impact My Estate in PA?

I hope that this article was helpful in explaining how to properly plan. Further, I included links to even more detailed information on my website so you can learn more. Therefore, please contact me and let me know how I did. Certainly, your comments and questions are welcome!

Let our Estate Planning lawyers help walk you through what can be a confusing process. To begin with, call to speak to one of our experienced estate planning lawyers.  By all means, our lawyers are ready to answer your questions. In fact, feel free to contact our office for a free consultation. Ultimately our goal is to make the process as painless as possible!

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