Question: My grandmother died with a will in 2015. She left my father $50,000. However, my father died in 2018 before the money could be disbursed to him. To complicate matters, his wife (my mother), who would have inherited the money from my dad, also died before grandmom’s inheritance could be disbursed to my dad’s estate. The money is finally in my dad’s estate account, and I am preparing my mom’s PA inheritance tax form. Where on that tax form would I put that $50,000?

Answer provided by: Lisa A. Shearman, Esq. from Hamburg, Rubin, Mullin, Maxwell & Lupin, P.C. in Lansdale, PA

On the PA Inheritance Tax Return (Rev-1500), it would be reported on Schedule E. Since it is cash that passes from your father’s estate to your mother, it would be most appropriate to include it on Schedule E.

You can include a description identifying it as an inheritance from your father’s estate to your mother that was owing at her death. Inheritance Tax would have been paid on the amount in your grandmother’s estate but there would be no inheritance tax due on the transfer from your father to your mother.

There will be inheritance tax on it coming out of your mother’s estate, net of any expenses.

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Lisa Shearman is a partner in the firm of Hamburg Rubin Mullin Maxwell & Lupin and an accomplished trust and estates and business lawyer. She has over 25 years of experience advising and implementing sophisticated estate plans for clients that focus on business continuity, succession and aim to reduce taxes and preserve wealth in the way her clients desire.

Her practice includes estate administration and post-mortem planning along with trust administration and the preparation of Inheritance tax, Federal Estate and Gift Tax and Fiduciary Income Tax Returns.

In addition, Lisa assists clients with the formation and operation of tax-exempt organizations including private foundations. She also has a substantial track record of successfully representing beneficiaries of estate and trusts in will contests, trust disputes and more in Orphans’ Court and has an active practice representing clients in guardianship matters.

A Treasurer of the Pennsylvania Bar Association’s Real Property, Probate and Trust Section Council and a Zone 9 Delegate to the PBA, Lisa serves as Treasurer of the Montgomery Bar Association and Chair of its Probate and Tax Section. She is a Fellow of the Montgomery Bar Foundation. She serves on the Board of the Montgomery County Estate Planning Council and the Wills for Heroes Foundation, for which she also serves as Vice President. Among other awards, Lisa is the 2015 recipient of the Pennsylvania Bar Association President Special Achievement Award and the 2014 Recipient of Milton O. Moss Community Service Award, presented by the Montgomery Bar Foundation.

A graduate of the University of Scranton (B.S. 1989), Lisa received her law degree from Widener University in 1992 and her LL.M. in Taxation from Villanova University School of Law in 1994.

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