Pennsylvanians who are concerned with estate planning should take into account the state’s inheritance tax. This tax is levied on the transfer of assets from a deceased person to their beneficiaries. Understanding how the Pennsylvania inheritance tax works can help you make informed decisions about your estate plan. In this article, we’ll discuss the basics of the Pennsylvania inheritance tax and how an Estate Planning Attorney can help you plan for it.
What is the Pennsylvania Inheritance Tax?
The Pennsylvania inheritance tax is a tax levied on the transfer of assets from a deceased person to their beneficiaries. This tax is based on the value of the assets transferred and the relationship between the deceased person and the beneficiary. The tax rates range from 0% to 15%, depending on the relationship between the deceased person and the beneficiary.
Who is subject to the Pennsylvania Inheritance Tax?
Pennsylvania residents and non-residents alike who own real estate or tangible personal property in the state are subject to the inheritance tax. Additionally, non-residents who own intangible property, such as stocks or bonds, located in Pennsylvania are also subject to the tax.
How Can an Estate Planning Attorney Help?
A lawyer specializing in estate planning can assist you in preparing for the Pennsylvania inheritance tax and reducing the financial impact on your heirs. Here are a few ways an attorney can help:
- Develop an Estate Plan: An estate planning attorney can help you develop an estate plan that takes the Pennsylvania inheritance tax. They can help you structure your assets in a way that minimizes the tax burden on your beneficiaries.
- Advise on Gifting Strategies: An attorney can advise you on gifting strategies that can help reduce the size of your estate and minimize the inheritance tax. This may include making annual gifts to beneficiaries or setting up a trust.
- Prepare and File Tax Returns: An estate planning attorney can prepare and file the necessary tax returns on behalf of the estate. They can ensure that all applicable deductions and exemptions are claimed to minimize the tax liability.
- Represent You in Disputes: In the event of a dispute with the Pennsylvania Department of Revenue over the amount of inheritance tax owed, an estate planning attorney can represent you and your estate in negotiations or in court.
