FAQ: Wills and Estates

Q: What is a will, and why should I have one?

A: In a Will, you name a personal representative or "executor" to administer your estate and distribute your assets according to your wishes. If you die without a Will, you have no control over who will administer your estate, and your estate will be distributed according to state laws. In your Will you should also name guardians to assume responsibility for your minor children’s care and the management of their funds and assets. You should have a Will and should review it periodically, especially when there are changes in your family circumstances or changes in estate or tax law.

Q: What are the procedures for distributing a person's assets after death?

A: When a loved one dies, most Wills must be "probated" to carry out his or her directions. If you have been named the executor of an estate, you have important legal responsibilities including the probate of the Will, notification of interested parties, gathering and managing the assets of the estate, preparing an inventory and accounting, payment of income and inheritance taxes, and distribution of the estate assets. It is strongly advised that you consult with an attorney promptly if you become an executor of an estate.

Q: What are the rates of inheritance tax for Pennsylvania residents?

A: Effective June 30, 2000, the Pennsylvania inheritance tax on property inherited by the deceased’s children, grandchildren, parents or grandparents was reduced from 6% to 4.5%. There continues to be no inheritance tax on property inherited by a surviving spouse. In addition, inheritance tax has been eliminated on property inherited by a parent from a deceased person under age 21. Finally, the inheritance tax rate on property inherited by a sibling (a brother or sister, or half-brother or half-sister) was reduced from 15% to 12%. All other inheritance tax rates remain at 15%.

Q: When does inheritance tax have to be paid?

A: An inheritance tax return is due 9 months following the date of death. A discount of 5% is granted on inheritance taxes paid within 3 months of death.

Q: What is a Power of Attorney?

A: A Power of Attorney is a legal document in which the Principal (the person giving a Power of Attorney) appoints an Agent to act on his or her behalf in all or specified matters during the Principal’s lifetime. A Durable Power of Attorney allows the Agent to act even when a Principal becomes incompetent or unable to handle his affairs.

Q: Who must execute a Power of Attorney?

A: A Principal must sign a special Notice regarding the authority of the Agent under the Power of Attorney and the Agent must also sign an Acknowledgement agreeing to act solely for the benefit of the Principal.

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