Nov 2017 AFR: 2.4%
Gift Annuity State Regulations

Pennsylvania


Intestacy


General Definition

All or any part of the estate of a decedent not effectively disposed of by will or otherwise passes to heirs, except as modified by the decedent's will. Sec. 2101.

Order of Distribution:
The intestate share of a decedent's surviving spouse is:

  1. If there is no surviving issue or parent of the decedent, the entire intestate estate.
  2. If there is no surviving issue of the decedent but a parent or parents, the first $30,000 plus 1/2 of the balance of the intestate estate.
  3. If there are surviving issue of the decedent all of whom are issue of the surviving spouse also, the first $30,000 plus 1/2 of the balance of the intestate estate.
  4. If there are surviving issue of the decedent one or more of who are not issue of the surviving spouse, 1/2 of the intestate estate.
  5. In case of partial intestacy any property received by the surviving spouse under the will shall satisfy the $30,000 allowance. Sec. 2102.

The share of the estate, if any, not passing to the surviving spouse passes in the following order:

  1. To the issue of the decedent.
  2. If no issue survives the decedent, then to the parent(s) of the decedent.
  3. If no parent survives the decedent, then to decedent's siblings and their issue by representation.
  4. If no issue of either of the decedent's parents but at least one grandparent survives the decedent, then half to the paternal grandparent(s) or if both are dead, to the children of each and the children of the deceased children of each and 1/2 to the maternal grandparent(s) or if both are dead to the children of each of them and the children of the deceased children of each of them. If both of the paternal grandparents or both of the maternal grandparents are dead leaving no child or grandchild to survive the decedent, the 1/2 which would have passed to them or to their children and grandchildren shall be added to the 1/2 passing to the grandparents or grandparent or to their children and grandchildren on the other side.
  5. If no grandparent survives the decedent, then to the uncles and aunts and the children and grandchildren of deceased uncles and aunts of the decedent.
  6. In default of all of the above mention persons, then to the Commonwealth of Pennsylvania. Sec. 2103.

Will Qualifications


Common Law or Community Property

Pennsylvania is a common law, elective share state.

Capacity

Any individual 18 years of age or older who is of sound mind may make a will. Sec. 2501.

Drafting

Every will must be in writing and signed by the testator at the end of the document. Sec. 2502.

Heirs

An "heir" is any person, including the surviving spouse and the state, who are entitled under the statutes of intestate succession to the property of a decedent.

Modifications

No will or codicil in writing, or any part thereof, can be revoked or altered otherwise than:

  1. By some other will or codicil in writing;
  2. By some other writing declaring the revocation, executed and proved in the manner required of wills; or
  3. By being burnt, torn, canceled, obliterated or destroyed, with the intent and for the purpose of revocation, by the testator himself or by another person in his presence and by his express direction. If such act is done by any person other than the testator, the direction of the testator must be proved by the oaths or affirmations of two competent witnesses. Sec. 2505.

If the testator is divorced after making a will, any provision in the will in favor of or relating to the former spouse is ineffective for all purposes unless it appears from the will that the provision was intended to survive the divorce. If a testator is married or has children subsequent to creating a valid will, the spouse and/or after born children are entitled to take the same share they would be entitled to, had the testator died intestate. Sec. 2507.

Probate Process


Naming of Personal Representative

Letters testamentary will be granted to the executor designated in the will. If an executor is not named in the will, letters will be awarded in the following order of preference:

  1. Those entitled to the residue of the estate under the will.
  2. The surviving spouse.
  3. Those entitled under the intestate law as the register, in its discretion, determines will best administer the estate, giving preference according to the sizes of the shares of those in this class.
  4. The principal creditors of the decedent.
  5. Other fit persons.
  6. If anyone of the foregoing shall renounce his right to letters of administration, the register, in its discretion, may appoint a nominee of the renouncing party.
  7. A support agency serving as guardian of an incapacitated person who dies during the guardianship
  8. A redevelopment authority. Sec. 3155.

Submission of Will

The register, at the request of any party in interest, will issue a citation directed to any person alleged to have possession of the will of the decedent requiring him/her, except were good cause is shown, to deposit the will with the register. Sec. 3137.

Notifications

The personal representative, immediately after the grant of letters, must publish notice of his/her appointment in a newspaper of general circulation once a week for three successive weeks. The notice must include the name and address of the personal representative and a request for all persons having claims against the estate of the decedent to make them known. Sec. 3162.

Inventory

The personal representative must file with the register a verified inventory of all real and personal property of the decedent, except real estate outside of the state. Sec. 3301(a). The inventory must be filed no later than the date the personal representative files an accounting of the estate or the due date, including any extension, for the filing of the inheritance tax return for the estate, whichever is earlier. Any interested party in the estate may request the filing of an inventory at an earlier date. In such an event, an inventory must be filed within three months after the appointment of the personal representative or within 30 days after the request, whichever is later. Sec. 3301.

Elective Share, Exempt Property and the Family Allowance

The surviving spouse has a right to an elective share of 1/3 of the following property:

  1. Property passing from the decedent by will or intestacy.
  2. Income or use for the remaining life of the spouse of property conveyed by the decedent during the marriage to the extent that the decedent at the time of death had the use of the property or an interest in or power to withdraw the income thereof.
  3. Property conveyed by the decedent during life to the extent that the decedent at the time of death had a power to revoke the conveyance or to consume, invade or dispose of the principal for his/her own benefit.
  4. Property conveyed by the decedent during the marriage to him/herself and another or others with right of survivorship to the extent of any interest in the property that the decedent had the power at the time of death unilaterally to convey absolutely or in fee.
  5. Survivorship rights conveyed to a beneficiary of an annuity contract to the extent it was purchased by the decedent during the marriage and the decedent was receiving annuity payments there from at the time of death.
  6. Property conveyed by the decedent during the marriage and within one year of death to the extent that the aggregate amount so conveyed to each donee exceeds $3,000, valued at the time of conveyance. Sec. 2203.

The spouse of any decedent and if there be no spouse, then children that are members of the household may retain or claim as an exemption either real or personal property, or both not exceeding $3,500 in value. However, property specifically devised or otherwise specifically disposed of by the decedent may not be claimed if other assets are available for the exemption. Sec. 3121.

Debts and Distributions

If the assets of the estate are insufficient to pay all proper charges and claims in full, the personal representative will pay them in the following order:

  1. The costs of administration.
  2. The family exemption.
  3. The costs of the decedent's funeral and burial and the costs of medical or nursing services performed within six months of death.
  4. The cost of a grave marker.
  5. Rents for the occupancy of the decedent's residence for six months immediately prior to his death.
  6. Claims by the Commonwealth and the political subdivisions of the Commonwealth.
  7. All other claims. Sec. 3392.

Except as otherwise provided by the will, if the assets are insufficient to pay all claimants and distributees in full, the shares of distributees, without distinction between real and personal estate, have priority of distribution in the following order:

  1. Property specifically devised or bequeathed to or for the benefit of the surviving spouse.
  2. Property specifically devised or bequeathed to or for the benefit of the decedent's issue.
  3. Property specifically devised or bequeathed to or for the benefit of other distributees.
  4. Property disposed of by will in the form of a general bequest of cash, stocks or bonds.
  5. Property disposed of by general devise or bequest and not included in a residuary clause.
  6. Property devised or bequeathed in a residuary clause.
  7. Property not disposed of by the will. Sec. 3541.

Inheritance Tax


Pennsylvania imposes an inheritance tax on the transfer of assets from a decedent to a beneficiary. Property passing to surviving spouse or to a parent from a child age 21 or younger is exempt.

The amount of the tax owed depends on the beneficiary's relation to the decedent. The tax rates are:

0% Spouse, Charity
4.5%Children, Grandchildren
12% Siblings
15% All others

Sec. 9116.

Income Tax Charitable Deductions and/or Credits


Pennsylvania does not offer taxpayers deductions for contributions to charitable organizations. 72 Pa. Cons. Stat. §7303.

Gift Annuity Requirements


Pennsylvania, a "conditional exemption" state, regulates the issuance of charitable gift annuities under the "Charitable Gift Annuity Exemption Act" of the Pennsylvania Consolidated Statutes Annotated, Title 10, Chapter 9 Secs. 361 through 364. The Act provides that if the issuing charity meets certain conditions, a qualifying charitable gift annuity is exempt from regulation by the Insurance Department Act of 1921.

Exemption Qualifications

To qualify, the charity must be described in Sec. 170(c), have been in continuous operation for at least three years (or be a successor to an organization that has) and have unrestricted and unencumbered assets (cash, cash equivalents or publicly traded securities) of at least $100,000 plus one-half of the principal value of any outstanding gift annuities. Furthermore, the charity must be an educational institution, hospital, charitable organization required to file a registration statement with the Department of State under the Solicitation of Funds for Charitable Purposes Act, senior citizen center or nursing home voluntarily filing with the Department, religious organization or any corporation established by an act of Congress that is required by Federal law to submit annual reports of its activities to Congress containing itemized accounts of all receipts and expenditures after being fully audited by the Department of Defense. For each of the above categories, there are further requirements listed in the statute. Notification is not required.

The gift annuity agreement qualifies if it complies with Sec. 501(m)(5) and contains these provisions in writing: a description of the basis of the charity's qualification; a statement that qualified charities must have been in existence for at least three years along with the date this charity or its predecessor came into existence; and a contact for obtaining copies of the charity's Sec. 170(c) status and financials (either government-filed or audited financials statements) showing the charity satisfies the unrestricted assets requirement.

If the charity receives more than $25,000 annually and is operating in the state, it must comply with the Solicitation of Funds for Charitable Purposes Act (10 P.S. Sec. 162.5-.6) which requires filing a registration document and corresponding documents, renewing the registration annually and paying the appropriate fees.

Disclosure Language

The agreement must also include the following disclosures:

"The parties acknowledge that, as of the date hereof, the fair market value of the property transferred to (the qualified charity) is substantially in excess of the fair market value of the annuity and that the difference between those values constitutes a gift by the donor (to the qualified charity) for its charitable purposes. (The qualified charity) has advised the donor that a charitable gift annuity is not designed primarily as an investment but rather as a charitable gift. The promise to pay the annuity is not insurance under the laws of Pennsylvania, is not subject to regulation by the Insurance Department and is not protected by the Pennsylvania Life and Health Insurance Guaranty Association under Article XVII of the act of May 17, 1921 (P.L 682, No. 284), known as The Insurance Company Law Act of 1921, or other protective device."

Reserve Requirements

Pennsylvania does not require an issuing charity to hold any amount in reserve.

Annual Filing Requirements

No annual reporting or notification is required.

State Contact Information

Pennsylvania Bureau of Charitable Organizations
207 North Office Building
Harrisburg, PA 17120
(717) 783-1720
(800) 732-0999

Information for Consumers

State Forms

None
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