Common Myths & Misunderstandings

"A trust avoids inheritance tax in Pennsylvania."

FALSE.

A revocable living trust provides zero inheritance tax savings. Assets in a revocable trust are taxed at exactly the same rates as assets passing through a will. This is the single most expensive misconception in Pennsylvania estate planning — families spend thousands on trust documents they don't need, based on advice that applies to California and Florida, not Pennsylvania. If your financial advisor told you this, they were wrong.

"Having a will means my family won't have to go through probate."

FALSE.

A will is a set of instructions that must be submitted to and approved by the Register of Wills. It makes probate smoother and faster — it does not eliminate it. The only assets that skip probate are those held jointly with rights of survivorship, in a trust, or with named beneficiaries (retirement accounts, life insurance, POD/TOD accounts).

"If I die without a will, the state gets everything."

ALMOST NEVER.

Escheat — the state taking your estate — is extremely rare. Pennsylvania law traces inheritance through an extensive chain: spouse, children, parents, siblings, grandparents, aunts/uncles, first cousins, and beyond. The Commonwealth gets your estate only if absolutely no relatives can be found at any level. A thorough heir search almost always locates someone. (But you should still have a will — because who inherits under intestacy may not be who you'd choose.)

"My spouse automatically gets everything."

NOT NECESSARILY.

If you have children from a prior relationship and die without a will, your spouse gets only 50% — the other 50% goes to your children. If you have no children but your parents are still alive, your spouse gets the first $30,000 plus half the balance — your parents get the rest. This surprises nearly everyone. A will is the only way to make sure your spouse gets what you intend.

"I'll just add my kid to the deed to avoid probate."

DANGEROUS.

Adding a child to your deed: (1) creates a present gift, potentially triggering gift tax; (2) exposes the property to your child's creditors, lawsuits, and divorce; (3) can disqualify you from Medicaid with a 5-year lookback penalty; (4) causes the child to lose the stepped-up tax basis at your death, resulting in a larger capital gains bill when they sell; and (5) if you have multiple children, permanently disinherits the ones not on the deed. A will or trust accomplishes the same probate-avoidance goal without any of these risks.

"My will controls my retirement accounts and life insurance."

NO — BENEFICIARY DESIGNATIONS OVERRIDE YOUR WILL.

Your 401(k), IRA, and life insurance pass to whoever is named on the beneficiary designation form — regardless of what your will says. If you named your ex-spouse as beneficiary during the marriage and never updated it after the divorce, your ex-spouse collects the full amount. Your children have no legal recourse. We see this regularly, and it's always devastating.