The new tax law that went into effect for 2018 will ultimately have no real impact on the estates of most people.
The biggest estate-related change is that the Federal Estate Tax upon death will only apply for an individual who has assets of more than $11.2 million and a couple who has more than $22.4 million in assets at the time of death (this exemption is double what it was under the old law).
Anyone with less than that amount of assets will not have to pay Federal Estate Tax to the Federal Government. Thus, this change will have no impact on most people, as most do not possess that kind of wealth.
However, this change does not affect the Pennsylvania Inheritance Tax, and upon death those taxes are still going to be owed to the Commonwealth of Pennsylvania at the same rates as before, which are and remain 0% for a spouse, 4.5% for lineal descendants (children, grandchildren, etc.), 12% for siblings, and 15% for everyone else in the world, including nieces and nephews.
Those rates were not changed by this tax law. If you are unsure of whether or not if, or how, the new tax law will affect your estate, it is important to talk to a professional.
If you have questions about your estate taxes or estate planning in general consider joining us at one of our upcoming FREE educational workshops. Just click here to RSVP for the day and time that work best for you.
Jeffrey Bellomo, Esq.