Often a person with a modest assets does not believe that their estate is large enough to necessitate having an estate plan in place. Your “estate” is simply that which you own. One of the easiest ways for a homeowner to make sure that, in case of their death, their home passes directly to their spouse, or to their partner, is to execute a Will.
If you reside in Pennsylvania at the time of your death and you do not have a Will in place, there are Pennsylvania Intestacy laws which dictate who will receive your estate at your death. These laws are found at 20 Pa.C.S.· § 2101 et seq.
If you do not have a Will and you are married, 100% of your estate may not go to your spouse. This may include your home. Do you have children? Are your parents still living? These are some of the factors that determine how your estate passes under the intestacy law. Another important consideration is how your assets are titled.
How is your home titled? The language of the deed to your home will play a big part in how your property passes at death. If you are married and the deed to your house is titled in both spouses’ names, with words such as “tenants in the entirety” or “joint owners with right to survivorship” then the house will pass to the surviving joint owner by deed and will not pass according to the structure of a Will. Alternatively, the deed may note each spouse’s name, then the phrase, “as husband and wife.” In these cases, the property will go to the surviving spouse according to the deed; we say “by operation of law.”
Note in this situation that when the home passes to the surviving spouse at the death of the first spouse there is no Pennsylvania Inheritance tax for this transfer. Why? The Pennsylvania Inheritance tax rate between spouses is 0%.
But what if your home, where you live with your spouse or partner, is only titled in your name? In this instance, the deed contains no language to direct the transfer of the property at the death of you, the owner. To ensure that this property, your home, passes to your spouse or your partner you should create an estate plan. You may direct in your Will how your home will pass at your death.
If you do not execute a Will, and your home is titled solely in your name, the property may pass according to the Intestacy laws. This may mean it does not go 100% to your spouse. It may pass partly to your spouse and your children, or partly to your spouse and your parents if you have no children. This also may result in your heirs, who are not your spouse, having to pay Pennsylvania Inheritance tax on the transfer of this asset.
Even people with modest means will benefit from the expertise and advice of an experienced estate planning attorney. A trained lawyer can help identify and avoid issues and problems that a free online Will or AI estate plan cannot.