After posting a blog about States With an Estate Tax or Inheritance Tax in 2013, I had several requests for a detailed chart pertaining to state estate taxes. Actually, I have had a chart listing state estate tax exemptions up and running since 2009: State Estate Tax and Exemption Chart.
In addition, I also have a chart which gives an overview of state inheritance tax laws: State Inheritance Tax Chart.
Yes, those charts do show the exemption amount in each of the states with an estate tax, but they omit a fundamentally important detail, namely the rates that pertain in each of those states. And above the exemption, is it a flat rate in each state or does the rate scale up on bigger estates?
What is the “interaction” between state and federal estate taxes if both pertain (i.e., any offset or credit for state estate tax when figuring federal estate)? For example, if a state has an exemption of $1M and taxes greater amounts at 16%, then what if someone leaves an estate of $7.25M when the federal exemption is $5.25M and greater amounts are taxed by the feds at 40%, how much in all will the estate owe to the state and the federal government.
What happens when an individual is a resident of one state but at the time of their death has property interests in both that state and another state? Might their estate be liable for estate taxes in both states, and would their estate get the full exemption amount in each of them? Might it make a difference whether it is “real” property that the decedent owned outright vs owned as a limited partnership interest? Owned as an LLC interest, either as part of a business operation or as an investment holding?
Answers to those questions would be most appreciated.
Unfortunately that type of detailed information is simply beyond the scope of this website; however, more specific information is available for certain states as indicated by the hyperlinks in the chart. In order to gain insight into how state estate taxes and/or inheritance taxes will personally affect you and your family, please consult with an attorney in the state where you are a resident as well as in any state where you own real estate.
Best regards,
Julie Ann Garber, Esq.
Attorney, The Andersen Firm, A Professional Corporation
Guide to Wills & Estate Planning
http://wills.about.com
email: wills.guide@about.com
About.com | Need. Know. Accomplish.
The information contained in this comment is not legal advice or tax advice and is not a substitute for legal advice or tax advice. For legal advice please consult with an attorney, and for tax advice please consult with an accountant or tax attorney.