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Tax
Planning 
Inheritance Tax Planning
•There are many opportunities to plan an efficient estate transfer with the focus being maximum benefit to the heirs with as little loss as possible in the transfer.
•Thieves of inheritances can include unnecessary probate costs, state inheritance taxes, federal estate taxes, and legal fees.
•Opportunities abound to reduce and eliminate these and other unnecessary costs, including family trusts, lifetime gifting, charitable gifting programs, and family limited partnerships, to name a few.
•Strategies also include the timing of selling stock and real estate assets, and whether to sell during lifetime or after death to maximize step-up in basis rules.
Inheritance Tax is the tax 'your estate' pays when you die although it can also be charged on certain lifetime gifts. However, Inheritance tax is not just a concern for the seriously wealthy. It is a growing worry for many people - but unlike many other taxes, there are plenty of things you can do now to make sure you pass as much of your wealth on to your family and friends, not the taxman.
These days, modest estates can be hit by Inheritance Tax. In the Pennsylvania tax code, estates passed to children are subject to a 4.5% Inheritance tax. When brothers and sisters inherit in Pennsylvania, a 12% Inheritance tax is assessed. And to all other outside recipients, a 15% Inheritance tax will be due.
So unless you plan carefully then it is possible that your estate too will be hit by Inheritance tax. It may seem very unfair that even after death, we are still pursued by the taxman. But plan now and you could cut the amount of inheritance tax your estate has to pay - meaning there will be more to pass on to your family and friends.
Inheritance tax is sometimes called a 'voluntary tax' by accountants simply because there is so much you can do to reduce its effect. After all, as American author and statesman Benjamin Franklin is reported to have said 'In this world nothing can be said to be certain, except death and taxes.' You can't do anything about the first, but prudent planning can reduce the pain of the second.
Q: What is Inheritance Tax?
A : Inheritance tax is the tax assessed by the State of Pennsylvania (and many other states) payable on your estate when you die. Your estate is mostly everything you own - all your assets minus anything you owe.
Q: What is my estate made up of?
A: As far as Inheritance Tax is concerned, your estate is what you own minus what you owe. There are some inclusions and exclusions however. Property which you own jointly with your spouse is not usually regarded as an asset subject to Pennsylvania Inheritance Tax. Check with a competent Tax Advisor or Attorney well versed in Pennsylvania Inheritance Tax regulations.
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