Under the current law, the federal estate tax only applies to estates whose total assets are in excess of $5,450,000. The federal estate tax applies to a bigger “bucket” of assets than the assets subject to Pennsylvania inheritance tax. One of the most common differences is that federal estate tax is often, but not always, subject to life insurance, while Pennsylvania inheritance tax does not. In a more recent change in the federal estate tax law, the unified credit amount of $5,450,000 is “portable” – which means that if it is not fully used at the time of the death of a first spouse, the unused portion is available to the surviving spouse, at their death, plus that surviving spouse’s unified credit amount.
When an individual has assets in excess of the unified credit amount, sophisticated estate planning may be utilized to reduce or limit any possible federal estate tax. The attorneys at Gentile Horoho & Avalli, P.C. have experience in structuring estate plans to avoid or minimize the federal estate tax on families.