Inheritance Tax in PA

Inheritance Tax in PA

PostBy: Rick 386 On: Thu Jan 05, 2017 10:01 am

Since my mother in law has passed, the siblings are having to deal with the will and all the other things.

So they go to the attorney who drew up her will. He proceeds to tell them that they will have to pay all these wonderful PA Inheritance taxes. The family is in shock. But then old Rick says wait a damn minute...................the small farm we live on is entered in the PA Act 319 or "Clean and Green" to lower the property taxes. Luckily my in laws were sticklers for keeping documents. We have a copy of the original notarized application to be entered in the Act 319 tax base. The application states that the property is an "agricultural preserve."

Digging a little further PA enacted Act 85 to exempt certain farm properties from the inheritance tax when they are passed direct to "lineal descendants." So it appears that there will be NO inheritance tax paid on the 18 acre property. :dancing:

And then digging a little further into the entire inheritance tax deal, I find reference that her IRA is also tax exempt. So little ole me, the dumb uneducated wrench turner, may have just saved them quite a chunk of change.

That's when I suggested to my wife that her and the siblings really keep a close eye on this "attorney." The attorney also stated his fees to them stating that he could charge just a percentage of the estate or be paid hourly. But being paid hourly he requires an upfront retainer. I suggested the hourly rate and that perhaps they need to seek out a "better qualified" attorney to handle things.

It seems like PA is 1 of only 6 or so states that actually has an inheritance tax. Lucky us !!


OMG, I'm starting to sound a little like DM here !!! toothy I really have a hard time with some who call themselves attorneys. It seems to me like they think they are the "Great OZ" since they went to law school. Most don't seem to have any common sense and once they get an idea or thought in their head, they are not too receptive to alternative thinking.



Rick
Rick 386
 
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Re: Inheritance Tax in PA

PostBy: waldo lemieux On: Thu Jan 05, 2017 10:04 am

Good catch Rick! I would recommend a new atty. post haste.
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Re: Inheritance Tax in PA

PostBy: Sunny Boy On: Thu Jan 05, 2017 10:21 am

Big red flags about that lawyer's competency right there. I'd dump him quick and find a lawyer that specializes in estates, family trusts, and elder care. They know the laws that apply to that specialized field of law.

We got a lawyer that specialized in that type of law when it came time to handle our family estates. It saved us on Fed and State taxes far more than what the lawyer charged.

Paul
Sunny Boy
 
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Re: Inheritance Tax in PA

PostBy: Logs On: Thu Jan 05, 2017 11:16 am

Elder care lawyer is what you need . Finding an honest lawyer is quite a chore. Good luck!
Dave
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Re: Inheritance Tax in PA

PostBy: titleist1 On: Thu Jan 05, 2017 11:49 am

Logs wrote:Finding an honest lawyer is quite a chore.


Unicorns, Sasquatch and the Loch Ness Monster are easier to find.

If you have a CPA you trust I would ask them who they would use as an attorney.
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Re: Inheritance Tax in PA

PostBy: gaw On: Thu Jan 05, 2017 2:02 pm

titleist1 wrote:
Logs wrote:Finding an honest lawyer is quite a chore.


Unicorns, Sasquatch and the Loch Ness Monster are easier to find.

If you have a CPA you trust I would ask them who they would use as an attorney.

You find schmucks in all walks of life, not just politicians. You have to educate yourself enough to know if someone is blowing smoke or competent and then you are pay for their expertise above your knowledge level otherwise you may as well do it yourself.
gaw
 
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Re: Inheritance Tax in PA

PostBy: CapeCoaler On: Thu Jan 05, 2017 11:50 pm

Been there done that...
Get a new attorney...
A good CPA will point you in the right direction...
Talk to people who went thru this...
Amazing what people will talk about when asked...
It is not something you do on a regular basis...
So you need to get it correct the first time...
Woah Nellie...
Take your time...
CapeCoaler
 
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Re: Inheritance Tax in PA

PostBy: windyhill4.2 On: Fri Jan 06, 2017 10:18 am

Rick,in 1973,when my father was killed in a farm accident,i was only 16 & was not privy to all the "legal" stuff, but i do remember my mother visiting an attorney . When she came home,she told us boys that we owned all the tools & equipment,seems that attorney was going to charge her some crazy percentage for all the possessions. We did not own the farm or any land property,just equipment & tools. She went to some district judge or something like that (too many yrs have passed for me to remember details) it only cost her a few hundred $$ to get all the "legal" crap done.
Check your options b4 settling for the final one.
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Re: Inheritance Tax in PA

PostBy: fifthg On: Fri Jan 06, 2017 10:46 am

Sorry for your loss.Unfortunately,there are a lot of lawyers that are more like weasels.The m.o.is like this:First they show a little sympathy for your loss to soften you up,next They scare the hell out of you with the fear of outrageous inheritance taxes,then soothe you by letting you feel like they are here to help you.They are here to help themselves,primarily.Advice to ask a cpa for a recommendation is good.You may need cpa to assist in asset valuation anyway.Ask cpa about how large is the exemption on estate asset taxation,which won't vary on federal level,but will from state to state.Research that for yourself online,and don't act like that makes you an expert,but when you see your attorney,he will know you are no fool.Unless you have a huge estate,much of the value is exempt.
fifthg
 
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Re: Inheritance Tax in PA

PostBy: Hambden Bob On: Fri Jan 06, 2017 6:52 pm

Uh,Yeah........ :bang:

I do believe this is where the Director yells : "Cut ! " and We bring in the " Stunt Estate Legal Team "......... :gee:

I also believe this Furschlugener is trying to give Your Family the Schvence !

Good Luck as You and Yours ease this one into low gear and find better qualified Pro's ! Nice catch,You Poor Knuckle-Dragger You ! :punk:

P.S. : This qualifies for entry into 'Ol Ham's "Book Of Shames".... You really don't need crap like this at a time like this.... You may not know how many Pennsy Folks You've helped with this ! :up:
Hambden Bob
 
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Re: Inheritance Tax in PA

PostBy: Rick 386 On: Tue Jan 10, 2017 9:34 am

Update :

So last night we meet with the attorney again. We were armed to the teeth with Act 319 and Act 85 articles from the internet relating to the exemption for frm use inheritance taxes. However we might have an issue........................

Seems like the Act 85 states that farms or what we are called is an "agricultural preserve" are exempt if they are passed directly to lineal siblings. However my mother in law's will states that there was to be a "trust" created to pass the property to. The trust would be made up of the 4 siblings. All having an equal share. So the attorney has to research if the property is passed to a trust if it would be exempt. Otherwise we may have to close the trust that was not formed and just pass it to all 4 individuals in a "tenant in common" or some other name he mentioned.

We are not in a real rush to probate the estate so we do have some time to get through all this legal mumbo jumbo. The attorney is leaving for a 3 week vacation to Australia so it will be about 1 month before we hear back from him.




Rick
Rick 386
 
Stoker Coal Boiler: AA 260 heating both sides of twin farmhouse
Hot Air Coal Stoker Stove: LL Hyfire II w/ coaltrol in garage
Coal Size/Type: Pea in AA 260, Rice in LL Hyfire II
Other Heating: Gas fired infared at work

Re: Inheritance Tax in PA

PostBy: Rick 386 On: Fri Jan 13, 2017 10:23 am

Update 01-13-17

According to the department of Revenue Inheritance Tax Division, the land only is not subject to the inheritance tax.
The buildings on the property are subject to the tax. :mad3:

On our Montgomery County tax bill it shows the value of the buildings and the separate value of the land. So you take the value of the buildings/houses and multiply that by a common level ratio of 1.78 and that value is the amount to be taxed at 4.5%
So by being enrolled as an "Agricultural Reserve" we saved over $8,000 inheritance tax on the land itself.

Surprisingly the Department of Revenue folks were quite helpful in explaining and offering suggestions to help lower the tax.

And PA is only 1 of 6 or 7 states to have this wonderful tax..........




Rick
Rick 386
 
Stoker Coal Boiler: AA 260 heating both sides of twin farmhouse
Hot Air Coal Stoker Stove: LL Hyfire II w/ coaltrol in garage
Coal Size/Type: Pea in AA 260, Rice in LL Hyfire II
Other Heating: Gas fired infared at work

Re: Inheritance Tax in PA

PostBy: oliver power On: Tue Feb 28, 2017 12:05 am

One thing I've learned about lawyers; When you hire one, they had better be on YOUR side, fighting for YOU. A lawyer should not be telling you how much it's going to cost you. You want a lawyer who tells you how to get around the costs. If not, send him down the road. Seen it happen too many times. Once the money is gone, so are they. You stay in control. Don't let the lawyer control you. Once it's over, it's too late.
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