The Martin Law Firm is an experienced Montgomery County probate and estate administration law firm located in Montgomery County, PA. Our knowledgeable PA Inheritance Tax attorneys assist estate executors and administrators with the preparation and filing of the PA Inheritance Tax Return, form PA REV-1500.
Many executors and administrators begin the Montgomery County estate administration process without legal assistance; however, when it comes time to complete the Inheritance Tax Return, the process may become too complicated. Our Inheritance Tax attorneys would be happy to work with you, regardless of what stage you have reached in the estate administration process.
Retirement Plan Assets for a PA Inheritance Tax Return
Assets in a retirement plan, whether it is a qualified pension, profit sharing, 401(k) plan, IRA, or other deferred compensation arrangement, are subject to the Montgomery County Inheritance Tax only if they are “available” to the participant before his or her death. The term “available” means “the right to possess (including proprietary rights on the termination of employment), enjoy, assign, or anticipate the payment of the benefit.”
The right to name a beneficiary of unconsumed benefits is not enough to make the benefits subject to the PA Inheritance Tax. The right to receive a stream of monthly payments is also not enough to make the benefit taxable. If, however, the decedent could have withdrawn the balance in the plan with a less than ten percent (10%) penalty, then it is taxable.
The regulations provide that if the decedent possessed the right to withdraw the benefits, but that right to withdraw is subject to a penalty of 10% or more, then the benefits are not considered available to the decedent before death and are therefore not taxable. Usually, these plan benefits are not available to anyone under the age of 59 ½ without payment of the 10% penalty, so if death occurs before age 59 ½ , the benefits are not subject to PA Inheritance Tax. After that time, when there is no penalty, the plans are subject to PA Inheritance Tax unless there is no option for a lump sum withdrawal.
PA Inheritance Tax Attorney | Montgomery County, PA
As with any PA Inheritance Tax issues, an executor or administrator of an estate in Montgomery County should always seek the advice of experienced counsel and/or a CPA who can provide proper tax guidance. The Martin Law Firm is an experienced PA probate and estate administration law practice, and our PA Inheritance Tax attorneys regularly assist executors and administrators with preparation and filing of PA Inheritance Tax Returns.
Our attorneys represent clients in Montgomery County, PA, as well as the surrounding areas of Bucks County, Philadelphia County, Chester County and Delaware County. Contact the experienced PA Inheritance Tax attorneys at The Martin Law Firm for a free case evaluation at 215-646-3980.