Components of a Philadelphia Estate
Posted on Tue Jul 15, 2014, on Estate Planning
From our “Ask a Question” Mailbag: What are the components of a Philadelphia Estate?
Recently updated June 30, 2018.
Your estate includes all your assets. Your estate includes all the assets that you own at your death that could be used to pay your debts. This consists of things you hold in your name or that you own jointly with others, including real property and bank accounts. It also includes your personal property, such as jewelry, cars or furniture. Your assets may also include your qualified plans (IRAs, 401ks, etc.) and life insurance, assets that you typically would have beneficiary designations.
Probate Estate vs. Taxable Estate.
While your “estate” is everything that you own, this is broken down into smaller pieces. The “Probate Estate” is the portion of your estate that passes through your Will. For example, if your IRA names a beneficiary, then it passes outside of probate to your heir. It is NOT part of the Probate Estate. But, it is part of the Taxable Estate.
The Taxable Estate is the portion of your estate that is subject to tax. For example, the Federal Estate Tax taxes life insurance. So, life insurance is part of your Federal Taxable Estate. But, Pennsylvania does not tax life insurance as part of the Inheritance Tax. Thus, life insurance IS NOT part of the Pennsylvania Taxable Estate.
Federal Estate Tax and Pennsylvania Inheritance Tax for the Philly Estate
The value of your estate is equal to the fair market value of all of the various assets, reduced by various deductions such as loans and mortgages you may have on the property. Some things are excluded, such as Pennsylvania excluding life insurance and real estate outside of Pennsylvania.
A good plan will analyze everything to determine if there are ways to reduce the taxes and to make sure that there are adequate liquid assets available to pay the taxes at your death.
More Planning Questions?
If you want to learn more about this topic, please read my more detailed article, Estate Planning Everything You Need to Know.
In Conclusion:
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 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!
Wills, Trusts, Probate, and Estate Litigation, It’s All We Do!
Tags:
Estate, Estate Tax, Federal Estate Tax, Pennsylvania, Pennsylvania Inheritance Tax rates, Philadelphia
