John B. Whalen, Jr., J.D., LL.M. ~ AV Rated ~ Bar Register ~ Lawyers.Com Law Blogs ~ Martindale.Com Lawyer Profile

Advised ~ Taxes and Estates

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Very simply, there are two (2) primary "death" taxes that may apply at a decedent's death in Pennsylvania.

  • The Federal Estate Tax (our federal "death" tax) taxes bequests beginning at a 45.00% tax rate. The Federal Estate Tax has a threshold, and does not begin to tax estates unless they are currently over $2,000,000.00 (in 2006, 2007, and 2008).  In 2009, 2010, and 2011, the Federal Estate Tax Threshold is scheduled to change - quickly and drastically, and absent any legislative change - over the next few years.
  • The Pennsylvania Inheritance Tax (our "state" death tax) taxes bequests at different tax rates.  The Pennsylvania Inheritance Tax has no threshold and begins to tax estates immediately.  The Pennsylvania Inheritance Tax taxes bequests to spouses and charities at a 0.00% rate; bequests to children, grandchildren, and parents at a 04.5% rate; bequests to siblings at a 12.00% rate; and bequests to everyone else at a 15.00% tax rate.

Be aware that, unlike the "income tax," which is very descriptive in its title as it is imposed upon your "income," the phrases "Estate Tax" and "Inheritance Tax" are misnomers that may tend to belie the actual fact that these are taxes imposed by virtue of your death, and, are merely "death taxes."

Be aware that a very common misunderstanding with respect to these 2 "death taxes" are the respective "thresholds."

  • The Federal Estate Tax  has a threshold.  It does not begin to tax estates unless they are currently over the threshold.
  • The Pennsylvania Inheritance Tax  has no threshold.  It begins to tax estates immediately.

Federal Estate Tax

Pennsylvania Inheritance Tax

Begins At A Threshold

Begins Immediately

2005 = 1.5 Million

2006 = 2.0 Million

2007 = 2.0 Million

2008 = 2.0 Million

2009 = 3.5 Million

2010 = Leaves (No Tax?)

2011 = Returns (1.0 Million?)

00.00% = Spouses and Charities

04.50% = Descendants

12.00% = Siblings

15.00% = Everyone Else

Mr. Whalen serves his clients by providing quality and timely legal services in the areas of Estate Planning Law (Powers of Attorney, Living Wills, Trusts, Wills); Estate Administration Law (Probate, Ancillary Probate, Inheritance, Taxation, Settlement); Guardianship Law (Proceedings, Administration); and Burial and Cemetery Law.  Mr. Whalen serves clients in Chester County PA, in Delaware County PA, in Montgomery County PA, and in Philadelphia County PA, and Mr. Whalen has served clients in Ambler PA, in Andorra PA, in Ardmore PA, in Aston Pa, in Audubon PA, in Avondale PA, in Berwyn PA, in Blue Bell PA, in Bridgeport PA, in Broomall PA, in Bryn Mawr PA, in Chadds Ford PA, in Chester Springs PA, in Chesterbrook PA, in Coatesville PA, in Collegeville PA, in Conshohocken PA, in Daylesford PA, in Devon PA, in Downingtown PA, in Doylestown PA, in Drexel Hill PA, in Eagleville PA, in East Brandywine PA, in Easttown PA, in Elkins Park PA, in Exton PA, in Fort Washington PA, in Frazer PA, in Glenside PA, in Great Valley PA, in Haverford PA, in Havertown PA, in Jeffersonville PA, in Kennett Square PA, in King of Prussia PA, in Lansdale PA, in Limerick PA, in Linfield PA, in Linwood PA, in Lower Merion PA, in Lower Providence PA, in Malvern PA, in Media PA, in Merion PA, in Narberth PA, in Newtown Square PA, in Norristown PA, in Oaks PA, in Overbrook PA, in Oxford PA, in Paoli PA, in Parkesburg PA, in Philadelphia PA, in Phoenixville PA, in Plymouth Meeting PA, in Pottstown PA, in Radnor PA, in Ridley Park PA, in Rosemont PA, in St. Davids PA, in Springfield PA, in Strafford PA, in Swarthmore PA, in Thorndale PA, in Tredyffrin PA, in Trooper PA, in Upper Dublin PA, in Upper Merion PA, in Upper Providence PA, in Valley Forge PA, in Villanova PA, in Wayne PA, in West Brandywine PA, in West Chester PA, in Westtown PA, in Whitemarsh PA, in Willistown PA, and in Wynnewoood PA.