Frequently Asked Questions

A.   Estate Planning

  1. What death taxes will my loved ones have to pay upon my death?

Depending upon the size of your estate, there are two (2) potential layers of death taxation that your Estate will face upon your death. The first is Pennsylvania Inheritance Tax. If your loved one passes away owning any interest in property or assets, including those that are jointly held or possess a beneficiary designation, it is subject to Pennsylvania Inheritance Tax. Proceeds from life insurance are not subject to Pennsylvania Inheritance Tax.

The Pennsylvania Inheritance Tax Rates are based on the relationship between the person who inherits as the person who died. Spouses pay at a 0% tax rate; children, grandchildren, and other lineal descendents pay at a 4.5% tax rate; siblings pay at a rate of 12%, and other relatives and non-relatives pay a rate of 15%. The Pennsylvania Inheritance tax return and full payment is due on or before the 9 month anniversary of a person’s death.

Federal Estate tax is owed for any estates with a value in excess of $2,000,000.00 for 2007 and 2008. In 2009, this figure will increase to $3,500,000.00. Unlike the Pennsylvania Inheritance Tax, proceeds from life insurance are subject to Federal Estate Tax. As with the Pennsylvania Inheritance Tax, the Federal Estate tax return and final payment are due on or before the 9 month anniversary of a person’s death.

  1. My loved one heard on the radio that going through probate was an expensive and time-consuming process, is this true?

Unlike other states, Pennsylvania has a very simplified probate system. Despite what talk-show hosts and misleading proponents of living trusts have stated, the overwhelming majority of probate estates in Pennsylvania are settled informally, without intervention of the courts. In fact, we frequently note to clients that typically the only time they will ever have to visit the courthouse during the probate process is when the Register of Wills appoints the Personal Representative, a process that takes about 15-20 minutes. Of course, as with living trusts, the estate can expect to pay legal fees, inheritance taxes, and fiduciary commissions during its administration. The strongest advice in this regard is never follow estate planning advice from a talk-show program or door to door salesperson; rather, one should always seek competent legal counsel who has experience in estate planning matters. In addition, one should always use their common sense in this area and ask themselves the question, “if it sounds too good to be true, it probably is.”

  1. Am I able in my Last Will and Testament or Trust provide for my pet after in the event my pet is still living after my death?

Yes. Under Pennsylvania law, a person may create a trust to care for the life of their pet that is alive during the person’s lifetime. Such a trust would last until the animal died, and provide necessary funds for the pet’s care and well-being to a caregiver designated in the Trust. Of course, in the alternative, a person may directly give their pet to another through their Will.




  1. I have several bank accounts. Recently, I placed my children’s names on the accounts. I have 3 children. In the event that I have to go into a nursing home, will only 1/4 of the money in my bank accounts have to be spent by the nursing home to pay for my care?

Unfortunately, no. Although adding persons to your bank accounts may confer ownership rights to them in the account after you die, while you are alive, under Pennsylvania law, the ownership rights to the account is based on the proportion of each person’s contribution to the account. Thus, if a parent owns all of the money in a bank account, places his/her children’s names on the account, and the children have contributed nothing to the value of the account, for all intents and purposes, the parent is said to own all of the account. Thus, the entire value of an account will be “spent down” to pay for a person’s nursing home costs if he/she require long-term or nursing home care.

  1. What is the so-called “look-back rule” regarding gifting and how does it work?

Frequently, persons who fear that they might have to enter a nursing home wish to avoid having their assets “spent down” to pay for their nursing home care. Instead, they desire to make gifts of money or their home to their children. If a person requires nursing home care and no longer can afford to pay for it, they may make application for Medical Assistance benefits to pay for their long-term or nursing home care. In order to qualify for Medical Assistance, gifts of cash or property made within five (5) years of the person’s application for Medical Assistance may disqualify that person from receiving Medial Assistance benefits to pay for their long-term or nursing home care.


C.   Real Estate

  1. I own a few residential rental properties. I have a tenant who has not paid rent for the past 2 months. May I just enter the property, change the locks, and remove the tenant’s belongings?

No. Although a residential tenant has been in severe arrears on their rent, a landlord is not permitted to use “self-help” such as changing the locks or forcefully removing the tenant or his/her possessions from the premises. Rather, the landlord must resort to the legal process to evict a tenant and recover any money damages.

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