Estate plans should consider tax for Pennsylvania residents
As people age, they begin to think more and more about what will happen to their property and money after they pass away. They might consult with family members to see who wants what, and make a will and trust deciding how assets will be distributed. While people often think about how it will be distributed, many times they fail to consider tax consequences.
Even though many people's estates fall under the $5.25 million federal estate tax trigger, there are state estate taxes to consider. They might vary from state to state, but the beneficiaries of an estate could be on the hook for paying them. If a person has assets such as homes in another state, the situation could be more complex.
Estate planning is key to ensuring the lowest amount of tax is passed on the beneficiaries after a person dies. Speaking with tax professionals and an experienced Pennsylvania estate planning attorney might be a wise decision for anyone over the age of 18. While a person might think they can wait to plan their estate, it is important for people to plan for the unexpected.
Not planning properly can cause confusion among the beneficiaries, and might pass unnecessary tax burdens onto them. Having more than one state claim residency of a person is one possible implication for people as they age. They might move to a different state, but still have ties that could result in two states trying to tax an estate. These types of issues can be addressed and hopefully avoided with proper planning.
Source: Chicago Tribune, "Plan now to avoid inheriting a tax mess," Amy Feldman, Aug. 8, 2013