Thursday, March 08, 2012

query: where to claim Pennsylvania inheritance tax withheld from escrow

We presume that a piece of PA real estate was sold at a time when the inheritance tax return had not yet been filed or the tax paid.  In this case, the title insurance agent would have closed and withheld funds in escrow to guarantee such a return would be filed with the state and proof of payment of any tax.

If you have filed the return and paid the tax, the place to start is to contact the title agency who withheld the funds in escrow at closing.  If the escrow was set up within the last five years, there is a good chance the funds are sitting in the agency escrow.

You may need some documentation of your transaction, so I suggest having on hand the HUD-1 Settlement  Statement and a copy of the escrow agreement.  Title insurance escrows in PA must be backed by a written agreement so you should have a copy.

If for some reason the title agency cannot be located, then look on the HUD-1 Settlement Statement - on the buyer's side - for the name of the title insurance underwriter.  You will find this in the 1100 section near the charge for title insurance.

If you are still having no luck, you could contact the PA Department of Insurance.  They write the rules for licensed agencies in PA and may be able to help.

  BTW When we hold this type of escrow we allow a one year period for resolution then if not resolved, when we have time, we send the money to the Register of Wills through a review process with the PA Dept. of Revenue who will then issue a release for the property in question.

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