Blog & Resources

Tax Returns for Pennsylvania Estates and Probate: If you are the executor of a Pennsylvania estate, you are responsible for filing all required tax returns. This will likely include the deceased’s last personal income tax return, both Pennsylvania and federal for all income from January first through the date of death. These are Forms 1040 and PA-40. If after the date of death the estate had income, for example from a bank account, stocks or rent, the estate will also need to file a federal and states income tax return. These are Forms 1041 and PA-41. Beyond income tax, you will also file a Pennsylvania Inheritance Tax Return (Form 1500) and you might have to file a Federal Estate Tax Return (Form 706).

Whenever I am helping my Pennsylvania clients with estate planning, or working with the executor of a Pennsylvania estate, I am given the opportunity to explain how the Pennsylvania Inheritance Tax works.

First, let’s break the tax down to its roots. The Pennsylvania Inheritance Tax is a Transfer Tax. It is different from the other taxes which you might pay regularly, like income tax, real estate tax or sales tax. A transfer tax is a tax levied when an asset is transferred from one owner to another. In this case, the transfer tax is taxing the transfer from the deceased to the beneficiary. You have paid transfer taxes in the past if you have ever bought a house or a vehicle with a title. To get the deed or title transferred you paid a fee to the state or county…a transfer tax.

The Bucks County Register of Wills possesses a wealth of data for those interested in genealogical research. When a Bucks County will is probated, the Register collects a copy of the person’s death certificate, the person’s original will, an inventory of the person’s probate assets and a copy of the person’s inheritance tax return.

The Bucks county probate file might also include many other family related items. All of these documents can provide invaluable family information to a person working on a family tree.

According to a recent national survey on pet ownership, there are more than 71 million households in the United States that own at least one pet. Many pets are an integral part of the family that owns them, but how many of these owners have considered what will happen to their pets after their death?

After the landmark U.S. Supreme Court decision in United States v. Windsor, which found unconstitutional the portion of the Defense of Marriage Act (“DOMA”) that defined “marriage” as a union between a man and woman, and “spouse” as only a person of the opposite sex, and the decision in Garden State Equality v. Dow, where the New Jersey courts found that the New Jersey Constitution required same sex marriage, New Jersey residents can enter into same-sex marriages and same-sex marriages from other states will be recognized as valid in New Jersey.

In Pennsylvania if a person dies without a will his or her assets are divided up under the Pennsylvania intestacy rules. If you are married without children all your assets pass to your surviving spouse. If you are married but have children your spouse does not receive everything. Pennsylvania presumes that if a deceased person without a will had children, then some of the assets should pass to the children.

After the landmark U.S. Supreme Court decision in United States v. Windsor, which found unconstitutional the portion of the Defense of Marriage Act (“DOMA”) that defined “marriage” as a union between a man and woman, and “spouse” as only a person of the opposite sex, and the decision in Whitewood v. Wolf, where the U.S. District Court struck down Pennsylvania’s ban on same-sex marriage, Pennsylvanians can enter into same-sex marriages and same-sex marriages from other states will be recognized as valid in Pennsylvania.

Governor Tom Corbett’s announcement in May of 2014 that he will not pursue an appeal of U.S. District Judge John Jones’ decision in Whitewood v. Wolf means that same-sex marriage is legal and here to stay in Pennsylvania. What does this mean for the estate planning same sex couples who choose to marry?

For centuries, trusts have been formed to provide safety and protection for valued assets. Recent changes in the law have made this old institution even more popular by reducing trust’s ongoing maintenance costs. You might think that only the very wealthy need the protection of a trust, but the truth is that a trust is a huge benefit to anyone having an asset in need of protection from their children’s creditors, divorce or from self-destructive beneficiaries.

Parents are often tempted to place property in Joint Tenancy with children. Because the child becomes a co-owner of the asset, the child is able to have easy access to the account to help the parent pay bills and manage the asset. Further, at the parent’s death the asset automatically passes outright to the child. While this type of ownership might first appear convenient, it is important to realize the potential pitfalls that come with joint ownership. Sometimes convenience comes at a high price.