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Philadelphia County Registered Domestic Partnerships and the Pennsylvania Inheritance Tax

Unlike the Commonwealth of Pennsylvania, of which Philadelphia is part, Philadelphia has recognized domestic partnership status and allows qualified partners to register formally as domestic partners.

Once registered as a domestic partner, Philadelphia then recognizes the couple as married for tax issues such as real estate transfer taxes.

The City of Philadelphia’s life partnership bills are as follows:

Bill No. 9707050 amended the City’s Fair Practices Ordinance to include a definition of Life Partnership being a long-term committed relationship between two unmarried individuals of the same gender. It prohibits discrimination based on marital status in employment, housing, public accommodation, and the provision of City services. In effect, the bill made Life Partners of City employees eligible for benefits under the City’s and municipal union’s various employee health plans. (Philadelphia Code Chapter 91100)

Bill No. 970745 amended the City’s Retirement System Ordinance to allow members of the Retirement System to name as beneficiaries and survivors any person designated by the employee, which could include one’s Life Partner. (Retirement System Ordinance and Municipal Retirement Benefit Plan Ordinance)

Unfortunately, the Pennsylvania Inheritance Tax is a Commonwealth Tax, not a Philadelphia Tax, so Philadelphia’s recognition has no effect on the Inheritance Tax. This means that instead of paying the 0% married couple inheritance tax rate registered Philadelphia domestic partners will pay the 15% rate of inheritance tax between unrelated person.

This means that even if you have registered as a Philadelphia domestic partner, you need to take steps to create an estate plan that recognizes that Pennsylvania does not recognize your relationship.

At a minimum, have your estate planning documents reviewed and updated by an estate planning professional (sometimes called a Philadelphia Will drafting attorney). Typically this means updating your Will, Power of Attorney for both Health Care and for Finances, review and verify the beneficiary designations made on your life insurance and qualified plans, clarify burial arrangements, and, if you have children, make crystal clear arrangements for custody and form trusts to hold assets for your children with both trustees and protectors.

Our website provides more information about our firm and more information about the services provided for same-sex couples by our Philadelphia Will Drafting Attorneys. Our firm focuses exclusively in the area of estate planning, probate, and the litigation surrounding estate planning and probate, so if you need assistance in developing your Estate Plan please call one of our Estate Planning Lawyers for a free consultation. We have Estate Planning Attorneys in Pennsylvania, New York, New Jersey, Minnesota and Florida. Estate Planning is all our Estate Planning Lawyers do!