Jonathan, first off want to sincerely thank you for your kindness and grace in sharing your knowledge at this time in your life.
I want to comment on PA inheritance tax and bringing this to light for PA residents. Pennsylvania is not kind to single people in particular. My sister Eileen died of a brain aneurysm suddenly before Christmas in 2015; I was executor of her estate. In today's parlance she was one of those wonderful
"Childless cat ladies". Most of her assets were in her retirement IRA where
she designated her nephews and niece to be the beneficiaries. With the 15% PA inheritance tax due, the estate had a huge tax liability. I paid the inheritance tax within 90 days to mitigate the sting a bit for the beneficiaries.
Just wanted to emphasize for all PA residents that IRAs are subject to PA inheritance tax in addition to Federal Tax when they make withdrawals from their inherited IRA. This is particularly hard on younger beneficiaries.
Was wondering if you had any thoughts for single people in PA who want to do something nice for the significant people in their lives which would not have such a tax burden. Would leaving a life insurance policy to nieces/nephews be a better solution? Any thoughts for how single people in PA should think about designating beneficiaries in their IRAs. Thank you,
Bridgette D.
Comments
Jonathan, first off want to sincerely thank you for your kindness and grace in sharing your knowledge at this time in your life. I want to comment on PA inheritance tax and bringing this to light for PA residents. Pennsylvania is not kind to single people in particular. My sister Eileen died of a brain aneurysm suddenly before Christmas in 2015; I was executor of her estate. In today's parlance she was one of those wonderful "Childless cat ladies". Most of her assets were in her retirement IRA where she designated her nephews and niece to be the beneficiaries. With the 15% PA inheritance tax due, the estate had a huge tax liability. I paid the inheritance tax within 90 days to mitigate the sting a bit for the beneficiaries. Just wanted to emphasize for all PA residents that IRAs are subject to PA inheritance tax in addition to Federal Tax when they make withdrawals from their inherited IRA. This is particularly hard on younger beneficiaries. Was wondering if you had any thoughts for single people in PA who want to do something nice for the significant people in their lives which would not have such a tax burden. Would leaving a life insurance policy to nieces/nephews be a better solution? Any thoughts for how single people in PA should think about designating beneficiaries in their IRAs. Thank you, Bridgette D.
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Link to comment from August 26, 2024