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3 important facts regarding probate in Pennsylvania

On Behalf of | Jan 19, 2021 | Estate Planning

Pennsylvania calls its probate court Orphans’ Court. Currently, it exists as a division of the Court of Common Pleas rather than as a separate entity.

Like other states, the commonwealth possesses specific regulations concerning inheritance. There are key facts those planning out their wills and heirs of an estate going through probate need to know about the process in the state.

1. Pennsylvania imposes an inheritance tax

While it does not have an estate tax, the Keystone state does levy an inheritance tax on each bequest left to each inheritor specified in the will. The rate changes based on familial closeness. This may be 0%, 4.5%, 12% or 15% depending on each one’s relationship to the decedent (sibling, parent, child and etcetera).

2. Simplified probate procedures exist for small estates

An estate may be exempt from the full probate process if its value exceeds $50,000, not taking into consideration automobiles or real estate. Other situations exclude the need for the whole procedure. Life insurance paid to the estate and wages owed to the departed may avoid it, though both have maximum amounts of $11,000 and $10,000 respectively before Orphans’ Court involves itself. Financial institutions grant family members $10,000 or less without probate proceedings once provided with a death certificate and evidence of a paid-for funeral.

3. Certain assets may bypass it

Living trusts, pay-on-death bank accounts, insurance payouts for estates and policies, retirement accounts and funds in a bank dedicated to final expenses generally do not go through Orphans’ Court. Intended recipients are already named.

Pennsylvania does not require all estates to undergo probate, depending on the value and the nature of the property. This means settling a loved ones’ final holdings does not have to be a long, drawn-out process.