Any assets which have a Beneficiary named (e.g. IRAs, 401(k)s, life insurance policies) or are jointly owned with someone else (e.g. joint bank accounts, assets which are owned jointly by a husband and wife or two spouses).
Any assets which are not non-probate assets; assets in the Decedent’s name alone such as bank accounts, investment accounts, motor vehicles.
A planning technique used where a person gives up direct access to certain assets which he or she intends to protect from creditors.
The tax charged by the federal government on estates upon the death of the asset owner. As of the new tax laws as of January 1, 2018, the federal estate tax currently applies to estates with assets valued more than $11,200,000 for an individual, or $22,400,000 for a married couple (this amount may change from year to year); not an issue for over 99% of Americans.
Tax charged by Commonwealth of Pennsylvania on estates upon the death of asset owner; Pennsylvania inheritance tax rates are as follows:
- 0% tax for a spouse or a parent from a child aged 21 or younger;
- 4.5% tax for lineal relatives (e.g. parents, grandparents, children, grandchildren);
- 12% tax for siblings;
- 15% tax for all others (including nieces and nephews).
Orphans’ Court is the court and process that looks after people who cannot make their own personal, health care and financial decisions. These people fall into three general categories: Minor Children (under age 18 in most states); Incapacitated Adults; and People who have died without legal arrangements to avoid probate. Probate proceedings can be expensive and time-consuming. Additionally, the court proceeding and associated documents are all a matter of public record. Many people choose to avoid probate in order to save money, spare their heirs a legal hassle, and keep their personal affairs private.
(In some states “Tenancy by the Entirety” when between spouses)
This is the most common form of asset ownership between spouses. Joint tenancy (or TBE) has the advantage of avoiding probate at the death of the first spouse. However, the surviving spouse should not add the names of other relatives to his or her assets. Doing so may subject their assets to loss through the debts, bankruptcies, divorces and/or lawsuits of any additional joint tenants. Joint tenancy planning also may result in unnecessary death taxes on the estate of a married couple.
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