Transferring Inherited PA Property

What happens when a resident of New York dies, owning a vacation home in the Poconos? Interestingly, this question pops up a good bit. Let’s say Tom and Mary Leisure own a home on Long Island where they principally reside. The couple bought a second home in Monroe County to enjoy during vacations. The deed to the Monroe County property is in both names and the mortgage is paid off. Mary Leisure dies in 2011. Tom does nothing to change the deed to the Pennsylvania property; however, he writes a Will leaving the property to his three children, all of whom are over the age of eighteen. His eldest daughter, Sally, is named as Executrix of his Estate.

In January 2015, Tom Leisure dies. Sally contacts an attorney in New York to raise an Estate and probate Tom Leisure’s Will in New York Surrogate’s Court. She is appointed Executrix by the Surrogate’s Court. How does the Pennsylvania property fit in? Following is a summary of the high points.

Sally’s attorney in New York will likely contact an attorney in Pennsylvania to assist with the transfer of title to the Pennsylvania property. For Pennsylvania, Sally must provide an exemplified copy of her Letters of Appointment, as well as an exemplified copy of Tom Leisure’s Will. “Exemplified” means that the documents carry the official mark or seal of the New York Surrogate’s Court. These documents are filed with the Register of Wills of Monroe County, along with an Affidavit of Foreign Fiduciary. Sally is considered a foreign fiduciary because her legal authority to act for the Estate comes from New York, not Pennsylvania.

Sally must also file a Non-Resident Decedent Inheritance Tax Return with the Commonwealth of Pennsylvania Department of Revenue. The return must be filed and the tax paid within nine months of Tom’s date of death. The tax rate is determined by Tom’s relationship to his beneficiaries. In this case, Tom’s Will leaves the Pennsylvania property to his three children. The tax rate for lineal descendants (children, grandchildren, etc.) is 4.5%. The tax is based upon the value of the property as of Tom’s date of death. This value is determined either by an appraisal or by using the latest tax assessed value of the property multiplied by the county common level ratio factor.

Sally must execute a Deed as Executrix transferring title to the property into the names of the three Leisure children. She will need a death certificate for Mary Leisure since Mary’s name appears on the Deed. No transfer tax is due since Pennsylvania exempts real estate transfers stemming from a testamentary devise. Once the Deed is recorded and the tax return accepted by the Commonwealth of Pennsylvania, Sally’s duties are complete in Pennsylvania.