Legal Question in Wills and Trusts in Pennsylvania
In my mother's will, 4 grandchildren are bequeathed $10,000 each. If my 5 siblings and I each deposit money into the estate account to be used to pay the grandchildren, will that $40,000 be seen as increasing the estate and therefore we'd have to pay more inheritance tax in Pennsylvania?
2 Answers from Attorneys
The bequest should be paid to the grandchildren from the estate. You and your siblings should not be making any deposit into the estate account. The estate account should contain only funds that were in your mother's accounts.
THIS RESPONSE IS NOT LEGAL ADVICE, SINCE I DO NOT HAVE ALL OF THE INFORMATION THAT WOULD BE REQUIRED, AND I DO NOT HAVE A REPRESENTATION AGREEMENT WITH YOU.
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Um - maybe I am missing something but the way it usually works is that someone dies and the beneficiaries get any inheritance from the estate of the deceased person. It does not work the other way. Living people do not give money to the estate of the dead person. If there is not enough money in the estate to pay the bequests, then the bequests are "adeemed."
There is a specific order for ademption. You need to speak to probate attorney before you do something that is going to have consequences. If you have spare cash, then you can give, free of any gift tax, up to $13,000 per person per year. If these are minors, consider starting a 529 plan at a state that has favorable treatment (not all 529 plans are the same and some are better than others).