Paying Inheritance Tax on Their Own Money?!
Posted on Jan 16, 2013
A Pennsylvania couple in their 80’s added their daughter's name to their bank accounts with the intent to allow her to have access to the money in case of their sudden deaths. Unfortunately, their daughter predeceased them.
The couple then received a Pennsylvania inheritance tax bill for thousands of dollars. It seems the state calculated that one-third of the money in their bank accounts was their daughter's and that her parents “inherited” the money back from her. That “inheritance” was subject to tax so they had to pay a tax on their own money.
Minnesota has an estate tax, but fortunately not an inheritance tax. Even so, adding your child to your bank account can bring many unintended negative consequences