Pennsylvania Inheritance Tax
Estate Planning
Understanding Pennsylvania Inheritance Tax: What You Need to Know in 2025
When planning your estate in Pennsylvania, understanding the inheritance tax is critical. Unlike the federal estate tax, Pennsylvania imposes a state-level inheritance tax on most transfers of property at death. At Clause Law Group, we help families across Pennsylvania and Florida navigate complex tax rules and protect their legacies.
What Is the Pennsylvania Inheritance Tax?
The Pennsylvania inheritance tax is a levy on beneficiaries who receive property from a decedent. The rate depends on the heir’s relationship to the deceased:
- 0% – Spouses, and children under age 21
- 4.5% – Lineal heirs (adult children, parents, grandparents)
- 12% – Siblings
- 15% – Other heirs (including friends, distant relatives, etc.)
This tax applies to most types of property, including:
- Real estate located in Pennsylvania
- Bank and investment accounts
- Personal property (vehicles, jewelry, etc.)
Life insurance proceeds paid directly to named beneficiaries are exempt, but assets passing through the estate generally are not.
How and When Is the Tax Paid?
Inheritance tax is due within 9 months of the date of death. A 5% discount is available if paid within three months. The personal representative of the estate is responsible for filing the Inheritance Tax Return (REV-1500) and ensuring payment is made.
Delays can result in penalties and interest, so timely planning and filing are essential.
Planning Strategies to Minimize Inheritance Tax
At Clause Law Group, we help clients explore options to reduce or avoid inheritance tax liability:
- Lifetime Gifting – Gifts made more than one year before death are not subject to inheritance tax
- Trust Planning – Properly structured trusts can shift assets outside of the taxable estate
- Asset Titling – Joint ownership with rights of survivorship may reduce exposure, depending on circumstances
Each strategy must be tailored to your unique circumstances and long-term goals.
Avoiding Surprises at a Difficult Time
Many families are caught off guard by the inheritance tax when settling a loved one’s estate. Inadequate planning can lead to:
- Unanticipated tax bills for heirs
- Forced sales of property to cover taxes
- Family disputes over unequal distributions
With clear guidance and proactive strategies, you can avoid these pitfalls and preserve your family’s wealth.
Partner with Clause Law Group
Whether you are preparing your own estate or handling a loved one’s, our attorneys provide trusted guidance on:
- Inheritance tax analysis and planning
- Probate administration
- Beneficiary designations
- Comprehensive estate plans
We serve clients in both Pennsylvania and Florida with compassion and clarity.
Schedule Your Consultation Today
📞 Let’s talk:
- PA Office: (570) 676-5212
- FL Office: (772) 341-5855
Estate planning should not come with surprises. We’ll help you make informed decisions—before the tax bill arrives.
Clause Law Group – Forward-Thinking Estate Planning. Reliable Results.
