If you are wondering what the Cranberry Township estate tax implications are, the fact is that Pennsylvania does not actually have an estate tax. However, a federal estate tax may be involved in your case, and you must keep in mind the state’s inheritance tax.
With a better understanding of how the estate tax works in Cranberry Township, you may be able to handle estate and financial planning more effectively. An experienced estate planning attorney could also assist with the estate planning process.
In Cranberry Township, there is no estate tax, as Pennsylvania is one of the 38 states in the U.S. where it does not apply. An estate tax would typically involve a state government taking a portion of a deceased person’s estate prior to the distribution of the estate to the person’s next of kin.
Instead of an estate tax, the state has an inheritance tax. These taxes go to the state government after the distribution of the estate to heirs. The specific percentage of taxes paid depends on the deceased party and the heir’s relationship.
For example, distributing an estate to children, grandchildren, and other direct lineal heirs will result in a 4.5% inheritance tax. Meanwhile, transferring an estate to siblings comes with a 12% tax, and any other next of kin will require a 15% inheritance tax, except for parents of deceased children under the age of 21, spouses, and certain tax-exempt government entities, charities, or institutions.
If a property located in Cranberry Township or elsewhere in Pennsylvania goes to any applicable heirs who are outside of the state, that property will also have an estate tax.
While individuals won’t have to pay an estate tax to the state government in Cranberry Township, a federal estate tax may still apply to a property.
Specifically, heirs will need to pay an estate tax on properties over $13.99 million in 2025 while subtracting any gifts. This $13.99 million exemption applies to individuals, meaning that married couples will not need to pay an estate tax if their estate is worth a total of $27.98 million or less.
The percentage of the estate tax will depend on the amount of money exceeding that exemption threshold.
For instance, a property might be worth $14.74 million, which would mean that the total taxable estate would be $750,000, as this is the amount the estate is over the $13.99 million threshold. Properties with this amount of taxable income would come with a base tax of $155,800 and a 37% federal estate tax.
To learn more about what to expect with the federal estate tax and whether an exemption might apply, individuals may benefit from working with a tax attorney, especially if the estate planning process is complex and difficult to navigate.
If you would like more information about Cranberry Township estate tax implications, you may want to speak with an experienced tax attorney to discuss your needs. A good lawyer could help with estate planning for young families, established families, and seniors looking to keep the process simple and protect their assets.
Additionally, attending a workshop could educate you on how to better protect all of your assets in the estate planning process. Contact us for a consultation or come to an elder law workshop.
