By: Dennis M. Twigg, Esq.
Hoffman, Comfort, Offutt, Scott & Halstad, LLP
More and more, people are moving between Maryland and Pennsylvania. This article highlights a few major differences between Pennsylvania and Maryland from an Estate Administration. It’s important to be aware of the differences when drafting a will or work on your estate planning documents.
1. Execution of a will: When drafting a will, it is important to execute in a manner that makes it as easy as possible for your family to probate your will. All wills should be witnessed by two competent and reliable parties, but in Pennsylvania, you will save your heirs some paperwork by using a self-proving will. A self-proving will requires extra signatures and a notary. Maryland does not have any provision regarding self-proving wills so if you executed a will and Maryland moved to Pennsylvania you may want to do a new document.
2. Estate Tax: Prior to 2019, Maryland taxes some decedents who have assets less than the Federal Estate Tax exemption. In 2015, if you pass away with more than $1.5 million in assets you may have to file a Maryland Estate Tax Return. That number goes up each year until it matches the Federal Exemption in 2019. Pennsylvania has no Estate Tax for decedents that fall under the Federal Estate Tax Exclusion.
3. Pennsylvania Inheritance Tax: With a few exceptions, Pennsylvania imposes an inheritance tax on inherited assets. Spouses do not owe inheritance tax and life insurance is exempt. The taxes apply to all assets: both probate assets in an estate and non-probate assets inherited by beneficiary designation or title. Depending on the relationship between the decedent and the beneficiary, this rate can 4.5%, 12%, or 15%. This means that plenty of decedents need Pennsylvania Inheritance Tax Returns filed upon their death.
If you move between any two states, it’s important to consult with an attorney licensed in the state where you’re moving. In the case of Maryland and Pennsylvania, it’s important to know about the differences in death taxes and the execution of documents, along with other matters that may be important for your own estate planning situation. In some instances, if your estate planning implications have great financial impact
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