Joint Tenancy and Right of Survivorship
My question involves estate proceedings in the state of: Pennsylvania
My grandmother's property was put under joint tenancy with right of survivorship with my father a few years ago to help with my grandmother's estate planning. My father died before she did however. I am a bit confused about this whole thing.. In my research it is my understanding that joint tenancy with right of survivorship would indicate that my father's interest in the property would simply evaporate and my grandmother would then own the whole property. However, I am being told that there is inheritance tax involved in this that my grandmother would need to pay as my dad's portion is transferred back to her? I don't understand why if so. Can anyone tell me if this is the case? Everything I've read seems to indicate otherwise.
Re: Joint Tenancy and Right of Survivorship
Whoever is telling you knows what they are talking about.
This is one of the pitfalls of using joint tenancy in PA. It is fine for probate avoidance and cutting down on the inheritance tax, but it does not eliminate it. And, for inheritance tax purposes, PA does not care how the ownership interest originated. A "gifted co-ownership interest" is the same as if a co-owner bought the interest. In PA's view, an owner is an owner is an owner...
Quote:
In my research it is my understanding that joint tenancy with right of survivorship would indicate that my father's interest in the property would simply evaporate...
Evaporate is not really the correct word. The interest transfers to the surviving co-owner(s) by operation of law. But it is still a transfer. And very few transfers escape the PA Inheritance Tax.