Estate planning

 

Despite that no one likes to think about these things, the old adage about "nothing certain but death and taxes" is never truer than when applied to estate planning. In particular, careful estate planning can save you and your loved ones a great deal of trouble, confusion, and money. By planning ahead, you have the ability to limit your taxes and ensure that your family and loved ones receive as much of your estate as possible. Establishing a last will and testament and planning ahead to minimize the assets that will be subject to probate can accomplish this.

In Pennsylvania, upon death, your estate will be subject to “probate.” This process involves the appointment of an executor or administrator of your estate, who will then gather all of your assets, pay your debts, pay inheritance taxes, and then finally, divide the remaining assets amongst your heirs. Pennsylvania is one of the few remaining states that has a state inheritance tax, which must be paid within nine months after the date of death. If Pennsylvania inheritance taxes are filed within three months of the date of death, a 5% discount is applied to the amount of tax due. Depending upon the size of your estate, it may be subject to federal inheritance tax as well.

Upon death, your estate will be considered either testate (meaning you died with a will) or intestate (you did not have a will). Whether or not you have a will can determine who gets what in your estate. If you have a will, you have control as to where your assets and possessions go. If you do not have a will, Pennsylvania has a law of intestacy, which provides for distribution to your heirs in accordance to your relationship to each person. In particular, if you wish to leave assets to a non-family member, including a domestic partner, you can only do so through a will; Pennsylvania intestacy law recognizes only blood relatives and spouses. A will need not be a formal document; Pennsylvania recognizes holographic wills, which are handwritten statements, signed by the testator.

In addition to a last will and testament, estate planning may involve the creation of trusts, jointly owned property, joint bank accounts, and other financial planning which will help minimize inheritance taxes. By planning ahead, you can save your family and loved ones a great deal of confusion and stress, and quite often, you can minimize family conflicts and prevent situations of heirs fighting over your assets. For more comprehensive estate planning, you should contact an attorney.

For more information as to the Allegheny County probate process, see http://www.alleghenycounty.us/wo/.


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