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.

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