State Estate and Inheritance Taxes are the Latest Worry

…but not in the Sunshine State of Florida

With Federal Estate tax all but disappearing as a source of revenue for the US Treasury, State-level “Death Taxes” have now become an increasing new ‘surprise’ to be concerned about.

The Federal Estate Tax  exemption amount is currently at $3.5 million of net assets per individual and $7 million for a married couples.  Many families are often not subject to Federal Estate taxes since they simply do not have net assets above that exemption level.

However, most states that do have an estate or inheritance tax (or both) – have not raised the state exemption level to match the Federal level.  Therefore, many taxpayers who might escape the Federal Estate tax could end up getting ensnared in a State Death Tax on the estate or inheritance – or both!

Beside updating any existing trusts to maximize the State exemptions between couples in addition to the Federal ones that may exist in the documents already, many tax advisors are making suggestions to their clients on “where” to retire to perhaps legally avoid State level “death taxes” altogether. 

Seventeen states plus Washington DC currently impose estate taxes.  Eight states currently impose an inheritance tax on heirs.  The States of Maryland and New Jersey current levy both estate and inheritance taxes!  It is important to realize that even if an individual lives in a state that does not have a “death tax”, owning real property or assets in another state that does impose such taxes – can make an individual subject to such taxes in those states.

The State of Florida is one such state that does not impose either an estate tax nor an inheritance tax.   On top of not currently having a State Income Tax for individuals, and fantastic weather year-round, Florida still remains the “iconic choice” for retirement! 

Read the full story in the Wall Street Journal:’s_Most_Popular

Bookmark and Share

2 thoughts on “State Estate and Inheritance Taxes are the Latest Worry

    • miamibeachcpa says:

      Thank you very much for your feedback, it is greatly appreciated! It is nice to know that the post is being read via a personal response vs. just seeing statistics of hits!

Leave a Reply