Estate Planning and Real Estate: Transferring Property in Pennsylvania

Why Real Estate Matters in Estate Planning

Real estate is often one of the most significant assets in an estate. Beyond its monetary value, real property may carry emotional and sentimental weight. However, without proper planning, transferring real estate can lead to delays, disputes, and unnecessary taxes.

Proactively addressing real estate in your estate plan allows you to:

• Avoid lengthy probate processes.

• Minimize disputes among heirs.

• Reduce potential tax burdens.

• Preserve your property for future generations.

Common Methods of Transferring Property in Pennsylvania

When transferring real estate, Pennsylvania law provides several methods. Each option comes with unique benefits and potential drawbacks:

1. Through a Will

• Overview: A will outlines your wishes for the distribution of property after death.

• Pros: Straightforward for smaller estates.

• Cons: Property distributed through a will must go through probate, which can be time-consuming and costly.

2. Joint Tenancy with Right of Survivorship

• Overview: Adding a joint tenant to the deed ensures the property passes automatically to the surviving owner upon death.

• Pros: Avoids probate.

• Cons: Joint tenants gain immediate ownership rights, which can complicate control during your lifetime.

3. Revocable Living Trust

• Overview: Transferring real estate into a revocable trust allows you to maintain control while designating beneficiaries to inherit the property.

• Pros: Avoids probate, offers privacy, and allows flexibility.

• Cons: Requires legal assistance to create and manage.

4. Lifetime Gifting

• Overview: You can gift property to your heirs during your lifetime.

• Pros: Reduces the size of your taxable estate.

• Cons: May trigger gift tax and affect capital gains step-up in basis.

Pennsylvania-Specific Considerations for Real Estate Transfers

Inheritance Tax

Pennsylvania imposes an inheritance tax on property transfers at death. The tax rate depends on the relationship between the deceased and the beneficiary:

• 0% for transfers to a surviving spouse or a child under 21.

• 4.5% for transfers to lineal descendants.

• 12% for transfers to siblings.

• 15% for all other beneficiaries.

Proper planning, such as holding property jointly with a spouse or using a trust, can help minimize or eliminate inheritance tax.

Title and Deed Requirements

Real estate transfers in Pennsylvania require an updated deed to reflect ownership changes. Any outstanding liens, mortgages, or title disputes must be resolved before the transfer.

Medicaid Estate Recovery

If Medicaid benefits were used, Pennsylvania’s Medicaid Estate Recovery Program may seek reimbursement from the estate. Trusts and other legal tools can protect real estate from such claims.

Benefits of Including Real Estate in Your Estate Plan

1. Avoiding Probate: Using tools like trusts and joint ownership bypasses the lengthy probate process.

2. Reducing Taxes: Proper planning minimizes inheritance and capital gains taxes.

3. Preserving Family Harmony: Clear instructions prevent disputes over property.

4. Shielding Assets: Strategies like trusts protect property from creditors and recovery programs.

5. Ensuring Control: Retain control of the property during your lifetime while planning for seamless transfer.

Common Mistakes in Real Estate Transfers

• Failing to Update Documents: Ensure your will, trust, and deeds reflect current wishes.

• Overlooking Tax Implications: Consult with an attorney to avoid unexpected tax consequences.

• Delaying Planning: Early planning offers more options and flexibility.

• Ignoring Title Issues: Clear liens or title disputes before transferring property.

How Ament Law Group, PC Can Help

Transferring property as part of an estate plan is a complex process, but you don’t have to navigate it alone. At Ament Law Group, PC, we specialize in estate planning and real estate law, offering tailored solutions that align with your goals while addressing Pennsylvania’s unique legal requirements.

Our attorneys can assist with:

• Drafting wills and trusts.

• Advising on tax-efficient property transfers.

• Resolving title and deed issues.

• Protecting property from Medicaid estate recovery.

• Avoiding probate through strategic planning.

Your real estate is more than just an asset—it’s part of your legacy. Ensure it’s protected and passed on according to your wishes with the help of the experienced attorneys at Ament Law Group, PC. With over 60 years of combined experience, we proudly serve clients across Westmoreland, Allegheny, Beaver, Butler, Washington, and Fayette Counties.

Call us today at 724-733-3500 or visit ament.law to schedule your consultation. Let us help you craft a comprehensive estate plan that secures your property for future generations. Don’t wait—start planning now!