With one exception, if a Pennsylvania resident dies before reaching the age 59½ his IRA is not subject to the Pennsylvania Inheritance Tax. This is because of a Pennsylvania rule stating that there will be no tax levied on the value of any retirement plan for which the deceased would have been penalized had he removed the funds during his lifetime.
Making gifts to nieces and nephews for Pennsylvanians forces the calculation of the Pennsylvania Inheritance Tax. The tax is levied on the transfer of your assets at your death, and the rates differ depending on who is the recipient.
Changing your bank account into a Joint-Ownership account with your daughter or making her the account’s Payable-On-Death beneficiary avoids probate, but these are different tools addressing different situations and goals.
Life insurance is not subject to the Pennsylvania Inheritance Tax, making it an excellent tool to make gifts to those who would otherwise be subject to the tax.
To avoid interest and penalties, the Pennsylvania Inheritance Tax must be paid within 9 months of the date of death. As executor, you are responsible to make the payment. If you delay and interest or penalties are created, the beneficiaries may demand that you be held responsible.
Changing your bank account into a Joint-Ownership account with your daughter or making her the Payable-On-Death beneficiary of the account avoids probate, but these are different tools addressing different situations and goals.
To avoid interest and penalties, the Pennsylvania Inheritance Tax must be paid within 9 months of the date of death. The date you filed the Will does not matter. Otherwise, executors would simply hold off filing the Will to delay making the tax payment.
For some estates, spending a little money now to avoid probate at death can create a substantial savings for the family. Typical techniques used to avoid probate include Revocable Living Trusts, Jointly Owned Accounts and Payable-on-Death designations on bank accounts and stock accounts.
For some New Jersey estates, spending a little money now to avoid probate with the Camden County Surrogate at death can create a substantial savings for the family. Typical techniques used to avoid probate in New Jersey include Revocable Living Trusts, Jointly Owned Accounts and Payable-on-Death designations on bank accounts and stock accounts.
Each Pennsylvania estate is subject to two potential estate related taxes; the Pennsylvania Inheritance Tax and the Federal Estate Tax. When you mention a “limit”, you are speaking about the Federal Estate Tax, not the Pennsylvania Inheritance Tax.
