SimplyTrust Knowledge Base

A: Pennsylvania has taxed inheritances since the 1800s, and it kept that system even as many states focused on estate taxes. For a time, the Commonwealth also used a "pick-up" estate tax tied to a federal credit. When Congress phased out that credit in 2005, Pennsylvania effectively let the state-level estate tax fade. The inheritance tax remained in place and still does today.

A: No. For decades, many states—including Pennsylvania—tied their estate taxes to a federal credit known informally as the "pick-up" credit. Under this setup, states could collect up to the amount the federal system credited for state taxes, so the total bill to families didn't increase; it just shifted who received it. In 2002, Pennsylvania briefly "decoupled," freezing its rules to pre-2001 federal law to preserve revenue. A year later, the state "recoupled," again matching the federal credit and allowing the estate tax to phase out as that credit disappeared in 2005.

A: Revocable trusts in South Carolina versus Nevada work similarly for probate avoidance. The differences come from property rules, tax settings, and Nevada's long-horizon options once planning shifts to irrevocable structures. Nevada is a community property state while South Carolina is an equitable distribution state. Neither state employs an estate tax or inheritance tax, although South Carolina has an income tax. Also, Nevada is famous for being "trust-friendly" and allows long durations for trusts (up to 365 years).

A: For years, South Carolina—like many states—used a "pick-up tax" or "sponge" tax. Instead of a standalone levy, the state collected an amount equal to the federal credit allowed for state death taxes. It didn't increase the overall bill; it simply redirected part of the federal tax to the state. When Congress passed the 2001 tax law (EGTRRA), it phased out that federal credit and ended it entirely in 2005, undercutting state pick-up systems.

A: In community property states, most assets and debts gained during a marriage are “ours.” Separate property still exists. (Think pre-marriage savings, personal gifts, and inheritances.) But only if you keep them truly separate. In equitable distribution states, judges don’t split everything 50/50 by default. Instead, they aim for a fair result based on factors like contributions, needs, and time together. “Fair” doesn’t always equal “equal.”During a LifetimeIn community property, either spouse can help manage community assets. Titling matters less than when you acquired the asset. In equitable distribution, title can carry more weight day-to-day. That brokerage account in one name? It may still be marital, but titling influences paperwork and access.After a PassingOwnership rules steer what’s in your probate estate and what your revocable trust can distribute. In community property states, the “community half” typically belongs to each spouse. In equitable distribution states, your plan focuses on what’s titled to you and what your beneficiary designations control. Hence, same tools, different math.

A: Both states recognize revocable (living) trusts that you can change or revoke at any time. Income inside the trust is still yours for tax purposes, which keeps annual tax filing simple. In other words, a revocable trust by itself doesn't reduce income or transfer taxes. It mainly helps with control, incapacity planning, and avoiding probate.

A: Oregon once had an inheritance-tax framework. But by 1987 the statutory inheritance tax rate was set to zero and the system effectively operated as a "pick-up" tax tied to a federal credit (the state death tax credit). When Congress later phased out that federal credit in the 2000s, Oregon had to choose whether to drop its death tax entirely or create its own stand-alone system. Lawmakers chose the latter. In 2011 Oregon put in place the modern estate tax (estate transfer tax) that applies independently of the federal credit.

A: An estate tax is charged on the estate’s total taxable value and is paid by the estate before distributions go to heirs. The federal government levies this tax, and some states do too. For 2025, the federal basic exclusion amount is $13.99 million per person—estates under that number generally owe no federal estate tax. An inheritance tax is different. It’s a state tax some heirs may owe based on what they personally receive and their relationship to the person who has passed. Only a handful of states impose it today.

A: First, Oregon explicitly chose to keep a state-level estate tax after federal changes in the 2000s eliminated the old system many states used. (Although there's no inheritance tax.)

A: Execution: New York requires a lifetime trust to be in writing and either acknowledged like a deed or signed with two witnesses (with at least one trustee also acknowledging if the grantor isn't the sole trustee). Nevada is more flexible (writing and signature; no universal two-witness rule), though notarization is standard practice.

A: Historically, states used different "death taxes": some taxed heirs (inheritance tax), some taxed estates, some did both. New York moved decisively toward the estate-tax-only model, aligning its rules with the old federal "pick-up" credit in the late 1990s and, after federal changes in the 2000s, keeping a stand-alone estate tax rather than reviving an inheritance tax. In short, the state chose to tax estates, not beneficiaries—and it still does.

A: A trust for Prince might have avoided probate entirely, keeping finances and business decisions private and moving faster. Trusts generally avoid court supervision and public filings, speeding up transfers and reducing conflict. With a trust, Prince could have 1) named a successor trustee and business team, 2) set valuation methods, 3) directed cash flow and releases, and 4) enhanced tax planning.