Douglas Kaune, Estate attorney
Remember to Review The Tax Allocation Clause In Your Will or Trust. by Douglas L. Kaune, Esquire. Most people do not realize that they can choose which beneficiaries will be responsible for paying the PA inheritance tax and federal estate tax on their taxable estate. Many wills are written automatically and sometimes incorrectly to say that the taxes are to be paid from the residue of the probate estate. Therefore, you could unexpectedly lay the entire tax burden on the shoulders of the people who are beneficiares under the will where there are beneficiaries of specific assets in the will, joint accounts or beneficiaries named on an IRA or 401K or stock account outside of the probate estate. The PA inheritance and federal estate taxes could be tens or hundreds of thousands of dollars so you should be careful to structure the tax clause, if desired, to make the beneficiaries of specific gifts or nonprobate assets responsible for paying the tax on what they receive.
Review this article for a closer look at the tax clause issue and specific examples of where it might be important to adjust the clause to insure a fair allocation of the taxes in your estate.
Please feel free to contact us at any time at 610-933-8069 or dkaune@utbf.com to discuss your particular case to determine the appropriate tax clause in your estate planning documents.
Wills * Trusts * Elder Law * Probate * Asset Protection * Power of Attorney * Estate Planning
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