...in this world nothing can be said to be certain, except death and taxes. - Benjamin Franklin
Yet, upon death, taxes are not necessarily certain. There are only 6 states which collect an inheritance tax, Pennsylvania being one of them. This is a tax based on the assets passing as an inheritance to a beneficiary. In Pennsylvania it is 0% passing to the spouse or a child under the age of 21, 4.5% passing to a lineal heir (adult child, grandchild, etc.), 12% passing to a sibling, and 15% passing to others, such as nieces, nephews and non-relatives.
If you have a very sizeable estate you may also owe a federal estate tax, which is a tax based on all estate assets regardless of who the beneficiary may be (unless it is a charitable organization). As of 2019, you would only owe federal estate taxes if your estate was valued at $11.4 million or more. This was increased to $11.58 million for 2020.
For both inheritance and estate taxes there are a number of ways to reduce the amount that is due through gifting, joint titling of assets and more. Contact Evashavik Law, LLC to discuss all your options.
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