While married couples can make use of
AB Trusts to transfer two times the federal estate tax exemption to their heirs free from federal estate taxes, in the 19 jurisdictions that collect a separate state estate tax AB Trust planning will cause part of the B Trust to be taxed when the first spouse dies. Enter the ABC Trust system of estate planning, which in 11 states allows payment of both federal and state estate taxes to be deferred until after the surviving spouse dies. So which 11 states allow for ABC Trust planning?
11 States That Allow for ABC Trust Planning
Of the 19 jurisdictions that currently collect a state estate tax - Connecticut, Delaware, District of Columbia, Illinois, Kansas, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Rhode Island, Tennessee, Vermont and Washington - the following 11 states allow for ABC Trust planning:
- Connecticut
- Illinois
- Kansas
- Maine
- Maryland
- Massachusetts
- Ohio
- Oregon
- Rhode Island
- Tennessee
- Washington
Refer to the
State Estate Tax Chart for information regarding the current estate tax exemptions for the 19 jurisdictions that collect an estate tax at the state level.
