It is never too early to think about estate planning in Pennsylvania. Proper estate planning allows you to take care of your loved ones after you pass away. Before beginning estate planning, it is wise to understand the different components. Then, you can work with an estate lawyer to plan your estate.
Estate planning law is similar from state to state, but Pennsylvania has some requirements. People should learn the requirements for wills, revocable living trusts and estate taxes before planning estates. Understanding the laws ensures that the decedent’s wishes are fulfilled. People can also use an estate planning attorney for additional guidance.
When Pennsylvania residents pass away without wills, an administrator is appointed and distributes the property in accordance with the intestacy laws. The property goes to the decedent’s closest relatives. If the decedent does not have any living relatives, the state seizes the property. People avoid this by making a will.
Pennsylvania law does not require people to notarize their wills or have witnesses during the signing. However, this opens the door for heirs to contest the contents of the will. Those who want to ensure their last wishes are respected should sign the will in front of two witnesses and then have it notarized. An attorney can prepare the will, provide witnesses and notarize it.
Some Pennsylvania residents set up revocable living trusts. The trust’s grantor creates and funds the trust and has full control while alive. This document is a substitute for a will and includes the property and beneficiaries. When the grantor passes away, the beneficiaries receive the property.
A revocable living trust allows beneficiaries to avoid the probate process if the grantor transfers the ownership of all the assets to the trust. If the grantor fails to transfer the assets, those assets must go through probate. People who want to keep assets private and those who own property in other states and want to avoid ancillary probate often use revocable living trusts. For example, someone who has a vacation home and a full-time residence in Pennsylvania might create a trust for the Florida home to avoid going through probate in two states.
Pennsylvania imposes an inheritance tax of 4.5% on property transfers to lineal heirs and direct decedents. The tax rate goes to 12% for siblings and 15% to all other heirs except exempt institutions, exempt government entities, and charitable organizations. The tax rate is 0% for transfers that go to a surviving spouse, a child aged 21 or younger, or a parent.
Due to the complexity of estate planning in Pennsylvania, it is wise to secure legal counsel. A lawyer can go over your assets and debts and help you choose a will or a revocable living trust. Your attorney can also provide guidance regarding inheritance taxes. You want to take care of your family after you pass away, and an attorney can give you the tools necessary.
Contact us here for more information from Kim A. Bodnar, Attorney at Law, or to schedule a consultation in our office in Pittsburgh. NOTE: This is for informational purposes only and does not constitute legal advice.
Check out what others are saying about our services on Yelp: Read our Yelp reviews.