An important aspect of estate planning is making sure that you have an understanding of the Pennsylvania inheritance tax and how it will impact your estate. Most assets that are in your name at the time of death are subject to Pennsylvania’s inheritance tax. The tax rate is based upon who receives the asset or assets from your estate. Assets received by your spouse are taxed at a rate of 0.00%, assets that are transferred to children and grandchildren are taxed at a rate of 4.50%, transfers to siblings are taxed at a rate of 12.00% and all other heirs are taxed at a rate of 15.00%. It is important to know these tax rates when deciding how your estate will be distributed in your Last Will and Testament.
It is also important to know that any asset transferred by you at least one year prior to your death is not subject to the Pennsylvania inheritance tax. Additionally, jointly held assets are only subject to the Pennsylvania inheritance tax based on your portion of ownership at death.
Although this is a basic summary of the Pennsylvania inheritance tax, our firm is happy to meet with you to discuss how the tax will impact your estate and heirs. Call 724-375-6683, or email me at CMcMillen@personallaw.com for a free consultation.