my father has one piece of property in Pennsylvania. When his time comes, I do not want to go through ancillary probate.
Would making the Pennsylvania property the only item of a revocable living trust be the answer to this problem?
What are the ways to avoid costly ancillary probate? My father and I live in New Jersey and …?
Posted in Probate Law.
2 Responses
Stay in touch with the conversation, subscribe to the RSS feed for comments on this post.
Inter vivos trust for Pennsylvania property.
This will not avoid Pennsylvania Inheritance Tax on the property. Currently the rate is at 4.5% for property passing to lineal descendants.
If the property were deeded to you now, it may be subject to Federal Gift Tax if it is worth more than the annual exclusion (currently $12,000 per donee per year). However, with most families, the “lifetime exemption” may essentially mean all that is required would just be filing the gift tax return with no tax being paid.
If your father dies within one year of a transfer, the entire value of the property would be subject to tax.
If your father deeded the property subject to the retention of a life estate, the value of the remainder would be subject to tax on his death.
Later edit: I think it is no big deal to do an ancillary administration in Pennsylvania. All that is required is filing an exemplified record of the probate for the other state (New Jersey), doing the required legal advertising of the issuance of letters testamentary, and paying any Inheritance Taxes.
Deed it to you as a gift now and retain a life estate.
He dies; your sole property outside of probate.
Only issue would be any gift taxes if applicable.