Blog & Resources

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.

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.

Beneficiaries of Philadelphia County estates will often approach us asking our help in keeping an eye on the estate’s executor. This is often the result of the executor not sharing information about the estate with the beneficiary, the executor’s unreasonable delays, or when the executor’s behavior has raised the beneficiary’s concern.

Your IRA is subject to the Pennsylvania Inheritance Tax, which can prove to be a tax trap.

For example, if you leave $100,000 from your IRA to a friend, that gift is subject to the 15% Pennsylvania Inheritance Tax rate. To avoid interest and penalties on the Pennsylvania Inheritance Tax, within 9 months of your death your friend must pay the Commonwealth $15,000. If your friend does not have $15,000 of liquid assets, she may have to remove the $15,000 from the IRA. If she does, this will trigger her to recognize $15,000 of income. If she does not have the liquid assets to pay the income taxes due on the $15,000, she may have to remove the money from the IRA, which triggers even more income taxes.

The Pennsylvania Inheritance Tax is levied on the net estate value, meaning the fair market value of the estate’s assets less expenses and debts.

If repairing the house for sale is reasonable, and the expenses paid are reasonable, they will be deducted from the sale proceeds when calculating the net estate.

Question: My son’s Godparents both died in Philadelphia with a will and a Revocable Living Trust and the executor will not give me a copy. How do I get a copy of the will and the Revocable Living Trust?

First, the father needs to understand the documents he is requesting. The Will is the document that is filed with the Philadelphia Register of Wills and which then dictates where the deceased’s assets pass after death.

If you are a Philadelphia resident with a will, following your death your executor will take your death certificate, the original copy of your will, a checkbook and an ID card to the Philadelphia Register of Wills Office to be sworn in as the executor of your estate.

Being an executor means that this person is a fiduciary with many responsibilities and duties. Selecting the correct person for the job is a vital part of your estate plan.

Question: As the Executor of a Philadelphia estate, can I hire an eviction attorney to remove a squatter from a rental owned by the estate?

It is the executor’s duty to protect the estate assets and to make them profitable. If the estate has a rental unit with a squatter, the beneficiaries could try to hold the executor responsible for lost rent if he does not act. Because this is an estate asset the executor is trying to optimize, he is free to use estate assets to retain an expert to assist in the eviction.

A little preparation will greatly decrease the amount of time you will spend in the Register of Wills’ office. If you are the named executor in a will and are preparing to take the will to the Register’s office, here is what you will need:

All your assets are included in your estate. For estate planning purposes, your estate includes all the assets that you own at your death that could be used to pay your debts. This would include things that you own in your own name or things 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.