The purpose of a last will and testament, colloquially known as a will, is generally to name heirs to one’s estate. Preparing for this eventual circumstance through estate planning can feel somewhat morbid, but it is an important act in order to provide peace of mind and the security of knowing where and to whom your assets will go.
Another reason to establish a will is to prevent any problems or arguments that could arise about your estate after your death. For example, asset transfer disputes and tax consequences may arise when an estate plan is not thoroughly thought out and well put into place. Some cases are even controversial and provocative enough that they become news headlines.
Recently a Pennsylvania woman filed a lawsuit in response to being forced to pay inheritance tax after the death of her wife in 2012. The woman believes she should not be required to pay this tax since the couple co-owned all of their assets and had married in another state. However, the case raises questions because their same-sex marriage was not recognized in Pennsylvania.
While the woman’s right to her inheritance is not in question itself, whether she must pay the allotted $11,000-tax has become a challenging debate.
While the future of this particular case remains to be seen, it is a reminder that in many cases it is possible to prevent unintended tax implications with very careful and cautious estate planning. Pennsylvania residents should talk to skilled estate planning attorneys about their wills and estate tax concerns.
Source: NBC 10, “Widow Says Inheritance Tax Discriminates Against Same-Sex Couples,” May 2, 2014