Over 22 Years Experience in Helping Executors Minimize Inheritance Taxes and Quick Estate Distribution
Death and Taxes! When a loved one dies, our Inheritance Tax Attorneys will help you transfer assets and make every effort to minimize the tax consequences of a loved one’s death.
What is the PA Inheritance Tax?
While Pennsylvania does not impose an estate tax due after the death of an individual, PA is one of only seven states that imposes an inheritance tax upon individuals receiving assets from a decedent living in Pennsylvania or a non-resident decedent who owned real estate or tangible property in Pennsylvania. The Pennsylvania Inheritance Tax is assessed on almost all property owned by an individual at the time of death and has differing tax rates depending on the recipient’s relationship to the decedent.
Elder Law Attorney – Protecting what matters most to Lehigh Valley families.
The PA Inheritance Tax rates for 2020 are as follows:
- Assets to Legally Married Spouses and Charities = 0%
- Assets to Children, Grandchildren, and Direct Descendants = 4.5%
- Assets to Siblings = 12%
- Assets to Others (Includes Nieces/Nephews, Cousins, Friends, etc.) = 15%
What Must be Filed?
The PA Inheritance Tax return, or the REV-1500, must be filed and the necessary taxes must be paid by the Personal Representative within nine months from the date of death to avoid a penalty of 25% of the tax due or $1,000 (whichever is less) from being assessed on the estate. The Pennsylvania Department of Revenue provides the REV-1500 and a 27-page REV-1500 instructional guide for anyone to access. Personal Representatives are encouraged to review these documents as soon as possible with a knowledgeable PA estates attorney, as a 5% tax discount will be applied if an estimated tax payment is made within three months of the date of death. Even if the required tax return is timely filed, it must be properly completed as well.When completing the return, it is important to attach copies of any referenced documents, including copies of the Will, expense and bank statements, and property appraisals. As with any tax return, audits are a real possibility if an estate’s tax return is improperly completed. The tax return is a complex document and preparing an error-free return can be difficult and confusing without the help of a lawyer. It is wise for any Personal Representative in Pennsylvania to speak with a qualified Pennsylvania probate administration or estate attorney before attempting to file the REV-1500 in order to avoid penalties and to ensure proper and timely completion.
What Property is Taxable?
All real property located in Pennsylvania and all personal property of a Pennsylvania resident is taxable under the Inheritance Tax. This includes cash, cars, furniture, antiques, jewelry, etc., located in Pennsylvania at the time of death as well as intangible property, including stocks, bonds, bank accounts, and certain retirement benefits, IRA accounts, and annuities, regardless of location. Jointly owned property is taxable (except between husband and wife) to the extent of the decedent’s interest in the joint property, including real estate, securities, and bank accounts. For example, if a house in Pennsylvania is owned equally between brother and sister (both residents of PA) for 10 years and then brother dies, his 50% interest in the property is part of his taxable estate. However, if the decedent created the joint interest in the property within one year of his or her death, the full value of the property is taxable. In the case of a non-resident, only the real property and tangible personal property located in Pennsylvania at the time of death is taxable.
How is the PA Inheritance Tax Amount Determined?
In order to determine the amount due under the PA Inheritance Tax, a Personal Representative must first ascertain the value of each of the decedent’s assets as of the date of death. With real estate, the value is typically determined by having an appraisal performed, while bank account values are obtained directly from the financial institutions. A Personal Representative’s failure to identify and value every asset of the estate will not only create an inaccurate tax return and potential liability as the fiduciary, but may also create problems after the estate is distributed to the heirs. Furthermore, the PA Inheritance Tax is not imposed on the gross value of an estate, as deductions may be made before taxes are assessed. A knowledgeable PA estate attorney can advise Personal Representatives on what deductions are allowed (including debts which are owed, funeral expenses, certain estate costs, and possibly a $3,500 “family exemption”) and how to calculate the total tax due.
Once the estate is valued and deductions are taken, the Personal Representative must look to whom the assets are passing to, either through the decedent’s Will or through Pennsylvania’s Intestacy Laws (if there is no Will). As stated above, the Pennsylvania Inheritance Tax rate depends on the relationship of the beneficiary to the decedent. At Snyder & Wiles, our estate and probate administration attorneys are here to assist you through the entire process.
In every area of law, it is important to have a strong personal connection between attorney and clients, and this connection is especially key when it comes to your family. When it comes time to take action, you need to be comfortable with the advice you receive is essential. Contact Snyder & Wiles, PC for a consultation regarding your estate planning, probate and inheritance tax needs, or fill out the form on this page. 610-391-9500.
Request Your Inheritance Tax Consultation
During your consultation session, one of our licensed Inheritance Tax attorneys will provide you with:
- A summary of tax issues and facts;
- Legal issues arising from those facts;
- Potential results and time-line for resolution.
Please include your telephone number and the best way to contact you.
- Big firm quality. Small firm flexibility.
- We take time to understand our clients.
- Committed to helping the Lehigh Valley.
- Attorneys for all aspects of your life.
Trusted Advocates Representing Lehigh Valley Residents!
Call 610-391-9500 For Your Strategy Session
I endorse this lawyer. Gladys is an outstanding lawyer. She sees issues that other lawyers miss. In summary, she is an exceptional litigator, a skilled communicator, and a terrific advocate for her clients. Clients are extremely well-served by her being their lawyer.
I feel very comfortable referring personal injury matters to Gladys. She not only is an experienced attorney, she also knows how to treat clients with dignity and respect.
Caring, top quality legal work in Allentown.
Attorney Wiles has assisted my entire family in many areas of the law including: estates, real estate, business matters, as well as elder law. She is very thorough and detail oriented, extremely knowledgeable, and compassionate.
Working with Attorney Wiles and her staff is such a blessing! They make you feel comfortable and that they will do their best to help you anyway they can. Attorney Wiles is the most respectful and caring person. You never feel like you are a bother when you call for anything. I would not deal with another Attorney again. I HIGHLY recommend Snyder and Wiles to anyone!
I have had the pleasure of working with Gladys as my Attorney and it is with great pleasure that I recommend her. She has great insight for the need of her clients. Gladys takes time to truly understand and know her client and what is important to them. She communicated information effectively and in a way for me to understand it. Lastly, Gladys was always positive and extremely professional.
I have used Gladys for both personal and business and I would highly recommend her to friends and family. Not only is she very knowledgable but she keeps things very simple and takes the time to explain things so we as the client understand. Gladys was also very sensitive and compassionate in dealing with the power of attorney for my mother. Thank you for being so fabulous and so genuine 🙂
Gladys made our estate planning easy and understandable. My wife and I left with a comfortable feeling. 5 Stars!
Gladys is well known and respected in the legal community as a knowledgeable and caring attorney who advocates strongly for the rights of her clients.
Our company has been doing business with Snyder & Wiles for over 5 years and have had a great experience with them. We would highly recommend them to anyone looking for a firm that pays attention to their clients needs. 5 Stars!