Pennsylvania is one of six U.S. states that still impose an inheritance tax, though the rest of Pennsylvania inheritance laws are fairly standard. There are also tight restrictions around what constitutes a valid will in the state, so be sure you know exactly what you’re doing. If you want expert advice, use the SmartAdvisor tool to get matched up with financial advisors nearby.
Does Pennsylvania Have an Inheritance Tax or Estate Tax?
As mentioned, Pennsylvania has an inheritance tax. This tax is served not on the estate, but on the specific inheritances going out to each of the decedent’s listed heirs. However, the inheritance of jointly owned property from the decedent to his or her surviving spouse isn’t included in this tax. There is no estate tax in Pennsylvania.
The rates for the inheritance tax range from 4.5% to 15%, depending on the exact situation. What you’ll have to pay and when is listed below:
|Pennsylvania Inheritance Tax|
|Tax Rate||Applies to|
|0%||– Inheritances to a spouse |
– Inheritances to a parent from a child 21 or under
|4.5%||– Inheritances for children |
– Inheritances for lineal heirs
|12%||– Inheritances for siblings|
|15%||– Inheritances for any other either |
– Excludes transfers to charitable organizations, government entities and exempt institutions
Other Necessary Tax Filings
The Pennsylvania inheritance tax isn’t the only applicable tax for the estates of decedents. There are other federal and state tax requirements an executor will need to take care of, like:
- Final individual federal and state income tax returns – each due by tax day of the year following the individual’s death
- Federal estate/trust income tax return – due by April 15 of the year following the individual’s death
- Federal estate tax return – due nine months after the individual’s death, though an automatic six-month extension is available if asked for prior to the conclusion of the nine-month period
- This is required only of individual estates that exceed a gross asset and prior taxable gift value of $11.4 million
A decedent’s Social Security number does not serve to identify his or her estate as well, so those who manage the estate must register for an employer identification number (EIN). This will represent the estate on all official documents. It’s possible to apply for an EIN online, by mail or via fax.
Dying With a Will in Pennsylvania
Pennsylvania currently has some of the strictest laws that constitute what a valid, or testate, will is in the U.S. While a testate will is not required to be notarized, it cannot be handwritten or communicated orally. Similar to nearly every other state, though, at least two witnesses must sign your will, indicating they were present at the time of your signature.
Aside from the typical naming of heirs for certain types of property, a testate will must also include an official estate executor, or personal representative. The main responsibilities of this person are to ensure that not only are your wishes met but also that your estate’s assets handle any outstanding debt or final expenses you incur.
Dying Without a Will in Pennsylvania
While less than ideal, some individuals are bound to pass away without having created a testate will. If your estate falls under this category, the state will label it intestate and enact laws governing the inheritance of such estates. Because valid wills essentially take care of inheritances themselves, most Pennsylvania inheritance laws are based around situations of intestate succession.
This system of succession was built using the philosophy that the majority of decedents would want their estates to end up with their closest relatives, like spouses, children, siblings and parents. But if this doesn’t sound desirable to you, it’s best to plan your estate according to your preferences.
The Probate Process in Pennsylvania Inheritance Laws
Essentially any estate worth more than $50,000, not including real property like land or a home and other final expenses, must go through the probate court process under Pennsylvania inheritance laws. This entails going to the court where the decedent owned property in the state and beginning a legal proceeding where a judge will keep a watchful eye over how the will is managed.
Estates that fall underneath that $50,000 mark are titled as “small estates” and can avoid probate. This will also significantly cut down on the amount of time it takes to execute the estate.
Probate courts are responsible for deciding on an estate executor for intestate estates as well. This will almost always end up being someone who has significant knowledge of not only the decedent and his or her family but also the property in question within the estate.
Spouses in Pennsylvania Inheritance Laws
While spouses will typically inherit most or all of their spouse’s intestate estate, children and parents can complicate that scenario. But if none of those relatives survive the decedent, the spouse is given the entire estate.
If the children in question were that of both you and your spouse, your spouse’s share drops to the first $30,000 of the intestate estate, plus half of the leftover balance. The rest is left to your children. The exact same policy applies if instead your parents survive you.
Should you pass away with surviving children from your current marriage and a past relationship, the piece of your intestate estate left for your spouse will fall to half. The latter half is divided between all your children, according to Pennsylvania inheritance laws.
Pennsylvania inheritance laws protect widows and widowers that were disinherited or heavily underrepresented by their spouse’s will by implementing an “elective share” policy. This allows spouses to claim ownership to a third of the decedent’s estate.
Children in Pennsylvania Inheritance Laws
Aside from spouses, children have some of the strongest rights to intestate inheritances in Pennsylvania law. In fact, if their parent was unmarried when he or she died, they’re afforded control of the entire estate, split evenly among them.
In situations where the decedent was married, the share the children will split depends on who their other parent was. If the decedent and his or her current spouse are their parents, the children are entitled to an inheritance only after the surviving spouse inherits $30,000 and half of the balance of the estate. But if the children were born out of marriage or during a previous relationship, their share shifts to half of the estate.
|Intestate Succession: Spouses & Children|
|Inheritance Situation||Who Inherits Your Property|
|– If spouse, but no children||– Entire estate to spouse|
|– If children, but no spouse||– Entire estate split evenly between children|
|– If spouse and only children from marriage||– First $30,000 of estate to spouse |
– 1/2 of the estate’s balance to spouse
– Leftover to children
|– If spouse and children from marriage and past relationship||– 1/2 of the estate to spouse |
– 1/2 of the estate split evenly between children
|– If spouse and parents||– First $30,000 of estate to spouse |
– 1/2 of the estate’s balance to spouse
– Leftover to parents
Children born throughout the life of your marriage are assumed to be biologically yours in Pennsylvania. Therefore the burden of proof is on you to prove that they’re not actually yours.
If you place one of your biological children up for adoption, and another family adopts him or her, your estate is relieved of any inheritance that kid would have been able to claim. Conversely, children you adopt into your family automatically gain the same inheritance rights of any biological child.
Family members besides children you placed up for adoption who were successfully adopted could become an heir to your intestate estate if they can inherit as a legal relative. However, this precondition requires you must have maintained a relationship with the person since the time of the adoption, according to Pennsylvania inheritance law.
Grandchildren, though they’re biological descendants, hold absolutely no inheritance rights. The only way this is waived is if your child, or his or her parent, predeceased you.
Stepchildren and foster children, though they might be considered a true part of your family, are not in the eyes of Pennsylvania. As a result, they will not inherit from your intestate estate.
If you’re expecting a child before you die, and it isn’t born until you’re already gone, that child remains entitled to a piece of your estate.
Unmarried Individuals Without Children in Pennsylvania Inheritance Law
Should you die without a spouse or children to inherit your intestate estate, Pennsylvania succession laws will decide with who your estate’s property will end up with. They go as follows:
|Intestate Succession: Extended Family|
|Inheritance Situation||Who Inherits Your Property|
|– If parents, but no spouse or children||– Entire estate to parents|
|– If no parents||– Estate split evenly among siblings|
|– If no siblings||– Estate split evenly among nieces and nephews|
|– If no nieces and nephews||– Estate split evenly among paternal/maternal grandparents|
|– If no grandparents||– Estate split evenly among paternal/maternal aunts and uncles|
|– If no aunts and uncles||– Estate split evenly among cousins|
The state of Pennsylvania will inherit your estate if none of these stipulations apply to your specific situation. But, as you can probably tell, the state does all it can to have your property stay in-family.
Non-Probate Pennsylvania Inheritances
There are certain assets and accounts of the decedent that the Pennsylvania probate court will not handle, as there has already been a beneficiary named for the following:
- Living trust assets
- Insurance policies
- Pay-on-death bank accounts
- Retirement accounts
- Insurance payouts for estates
- Certain funds in a bank account for final expenses
Other Situations in Pennsylvania Inheritance Law
In order to be a valid heir to an intestate estate, you must survive for at least five days following the death of the testator, the creator of the will. So if a relative or anyone else listed as a possible heir dies within five days of the testator, they will not hold a right to inheritance.
The law in Pennsylvania treats half-blood and full-blood relatives the same in intestate succession. So even if you only share one parent with a brother or sister, he or she gets typical inheritance rights for siblings.
If someone in your family was pregnant when you died, and he or she has their child after you’ve already died, the child is afforded the same right to inheritance he or she would have had if you were still around, according to Pennsylvania inheritance laws.
Regardless of whether he or she was in your will or not, any individual that willingly murders you will have his or her inheritance rights stripped away by Pennsylvania.
Illegal immigrants and non-citizens are still eligible to be heirs under Pennsylvania law. This is applicable under both intestate succession and situations where there is a valid will.
Resources for Estate Planning
Handling the ins and outs of inheriting from the estate of a loved one or managing your own estate can include many complex elements to factor in. It can be such an overwhelming venture — with taxes to file, possible court proceedings to go through and more — that you might want some help.
The SmartAsset financial advisor matching tool will pair you with as many as three nearby financial advisors equipped to handle your estate and inheritance planning needs in accordance with Pennsylvania inheritance laws. Matches are found based on your answers to a few simple questions, so be as specific as possible when stating what you’re looking to handle in your financial life.
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