Wills & Estate Planning
Moving From/to a New State? Make Sure to Have Your Estate Plan Reviewed When You Are Settled
April 7, 2022When relocating to a new state, it is important to have your estate plan documents, such as a Will, Power Of Attorney, Durable Health Care Power Of Attorney (Living Will), or Trust, reviewed by an attorney in your new state as soon as possible, as some states have unique laws and requirements regarding these documents. Estate and Inheritance Tax provisions should also be considered upon relocating.
The Tax Process During an Estate Administration
March 18, 2022COVID 19 Impacts That May Require Estate Planning Review
February 26, 2021
There are many compelling reasons to review your Estate Plan. The impact of COVID-19 is currently among the most important reasons. We offer specific factors here. The attorneys at Pyfer Reese are ready to assist you with your Estate Plan needs.
In reviewing your Estate Plan, you may want to consider the following:
What is a Prenuptial Agreement
December 5, 2019A Prenuptial Agreement is an agreement between two individuals who intend to marry. The Agreement can limit many things or only a few things. The content of the Agreement depends on what the parties (potential Husband and potential Wife) desire to address. Some of the reasons that engaged couples prepare and sign Prenuptial Agreements are the following.
• The protection of existing assets.
• Avoid paying spousal support, temporary alimony, and alimony.
• The protection of business interests, particularly family businesses.
• The protection of assets that were received as a result of a gift or inheritance or from a prior relationship.
• Estate planning.
Living Trusts | Revisited
November 7, 2019If you created a Living Trust or a Revocable Trust years ago when the Federal Estate Tax Laws were completely different than they are today, it is a good idea to have the Trust reviewed by an attorney. It may no longer be appropriate to have your assets titled in the Trust, and it can even be harmful from both a tax standpoint as well as an estate administration standpoint. It may now be advantageous to have the Trust updated or even revoked. In some instances, a Trust may have been created, but the assets were never properly transferred to the Trust, which entirely defeats the purpose of the Trust.
Tax? What tax? We’ll Help You Unravel the Mystery.
July 17, 2018Unlike Federal Estate Tax which is only assessed if the value of an estate exceeds
11 Million Dollars, Pennsylvania Inheritance Tax applies regardless of the size of an estate. Pennsylvania’s Inheritance Tax is a transfer tax on the property that a beneficiary will receive from your estate. The tax amounts vary based upon your relationship to the decedent and the value of the property you will be receiving. In Pennsylvania, the inheritance tax rates are as follows:
— Parents, children, grandchildren and stepchildren, are taxed at a rate of 4.5%.
— Siblings are taxed at a rate of 12%.
— Nieces, nephews and unrelated individuals are taxed at a rate of 15%.
If a child under the age of 21 dies with assets, the assets passing from the child to the parent or stepparent will not be taxed.
Charities are exempt from Pennsylvania Inheritance Tax, as are assets which are owned by spouses with the right of survivorship.
At the time counsel for the Executor or Administrator prepares the Tax Return, the tax is not imposed on the gross value of the estate. The outstanding debts are deducted, as are the funeral expenses and other estate settlement costs. There is also a $3,500 family exemption deduction for relatives with whom the decedent resided.
Some types of property are entirely exempt from taxation. Typically, a husband and wife own their property jointly. Upon the death of the first spouse, there will be no Pennsylvania Inheritance Tax due. If one spouse owns property in his or her name alone, then it would be taxable; however no tax would be owing because the spousal tax rate is set at zero percent.
Life Insurance proceeds and certain types of retirement plans are exempt from Pennsylvania Inheritance Tax, as are family owned businesses that meet the qualifications set forth in Act 52 of 2013. Farms may also be exempt if they are passing to a child, grandchild or sibling.
In addition, certain bank accounts, stocks, bonds, mutual funds and other securities can be designated as “pay on death” or “transfer on death” to make for a smoother transfer of those assets upon your death; however, they are still subject to the applicable tax. It is also very important when designating assets in this way that you make sure you are not contradicting the terms of your Will.
If a parent gifts their home or other assets to a child but does not survive for a period of one year thereafter, the gift would be subject to the 4.5% inheritance tax if it had a value in excess of $3,000. Likewise, when gifting a home to a child, but reserving a lifetime right to reside in the home, upon your death, the value of the home would be taxed.
Pyfer Reese is here to assist with your estate planning and to help you navigate through the complex estate administration process. Our experienced attorneys can provide you with an individualized plan to ensure your beneficiaries receive the maximum net amount possible from the inheritance you leave for their benefit. Contact us today at 717-299-7342 for a convenient appointment with one of our attorneys.
~Christopher C. Straub, Esquire
The Importance of Consistently Reviewing and Updating Your Estate Plan
April 12, 2018There are three main documents that encompass an estate plan: A Will, a Power of Attorney, and a Health Care Directive or Living Will. In addition, certain situations merit creating a Trust or retitling real estate. Estate planning documents should be reviewed every few years and revised as life changes (or the law) require. Some examples of life events that may prompt a review of your estate plan include marriage, separation or divorce, birth of a child, death of a family member, acquisition or sale of significant assets, receiving an inheritance, moving into Pennsylvania from another State or Country, retirement from employment, eldercare situations, and changes to existing tax laws.
It is important to have an estate plan, even if you have limited assets. If you have minor children or a dependent adult child for whom you provide care, appointing a Guardian through your Power of Attorney to care for the children on a temporary or emergency basis in the event of an accident or illness can give you peace of mind. By naming a Guardian of minors or dependent adult children in your Will, you can be assured your loved ones will be cared for in the event of your passing.
Determining beneficiaries of assets that pass outside of a Will, such as life insurance, retirement accounts, pension, investment and brokerage accounts, also warrants careful consideration. Do not overlook updating the beneficiary forms for those assets as your life circumstances change.
In addition, despite the elimination of Estate Tax concerns for most individuals and families, Pennsylvania is one of the few states which continues to assess Inheritance Tax on asset transfers upon an individual’s passing. We can help you plan to reduce this tax obligation.
Pyfer Reese Straub Gray & Farhat PC is here to assist you in all of your estate planning needs. Our experienced attorneys* can provide you with an individualized plan pertaining to your specific situation. We can assist you in developing an estate plan for any stage of life, whether you are a single person, a newly married couple, a young family, empty-nesters, or in need of eldercare advice. Contact us today at 717.299.7342 for a convenient appointment, including home visits (if needed), to discuss the appropriate estate plan for your current life situation. *Attorneys Sandra Edwards Gray, Christopher C. Straub, John F. Pyfer, Jr. or Albert J. Meier will be happy to assist you.