The recent decision striking down PA’s ban on same-sex marriage gives same-sex married couples new estate planning opportunities.

Pennsylvania now recognizes same-sex marriages.  This is a game changer.

Until now, same-sex married couples were not afforded the same favorable estate planning opportunities as hetero-sexual couples when it comes to state inheritance tax.

The rates for Pennsylvania inheritance tax are as follows:

  • 0 percent on transfers to a surviving spouse or to a parent from a child aged 21 or younger;
  • 4.5 percent on transfers to direct descendants and lineal heirs;
  • 12 percent on transfers to siblings; and
  • 15 percent on transfers to other heirs, except charitable organizations, exempt institutions and government entities exempt from tax.

While hetero couples could plan around a 0% tax rate, same-sex couples, although married (in another state) and living their entire lives in PA as a married couple, were taxed at the 15% rate enacted for “other heirs.”  This was patently unfair, but until the recent decision, it was the law.

Now, thanks to the landmark decision in Whitewood v. Wolf, same-sex couples have the same planning opportunities as hetero couples regarding PA’s inheritance tax.

For same-sex couples, the time to update your estate plans is right now.

Celebrity Wills – Jerry Garcia

20140504-212034.jpg

Jerry Garcia had 5 custom guitars made by Doug Erwin. This is what Jerry’s will stated regarding those instruments:

FIFTH GUITARS
I give all my guitars made by DOUGLAS ERWIN, to DOUGLAS ERWIN, or to his estate if he predeceases me. livingtrustnetwork.com

After Jerry’s death in 1995 this bequest was the subject of a legal battle between the remaining Grateful Dead band members and Erwin. The band claimed the guitars were the band’s property and therefore not part of Garcia’s probate estate. The suit was settled with Erwin getting 2 of the guitars, which he sold at auction for about $1.75 million. Wikipedia