Estate Taxes: Beware the State Tax Bite
Under the current federal tax laws, nearly every American family will be spared from estate taxes upon death. That is because there is a current exemption amount of $11,180,000 per person (or doubled to $22,360,000 for a married couple). Thus, unless your assets exceed these amounts at your date of death, your family/estate will not owe any estate taxes. At least not to the IRS and the Federal government.
However, there are 12 states, plus the District of Columbia, that impose their own version of estate/inheritance taxes. And these numbers can be substantial. Here is a listing of these locales (and if you happen to reside in one of these States it may be very beneficial to seek out a quick consult with an estate planning attorney in your area):
| State | Exemption Level | Estate Tax Rates |
| Connecticut | $2,600,000 | 7.2% to 12% |
| District of Columbia | $5,600,000 | 8% to 16% |
| Hawaii | $5,490,000 | 10% to 15.7% |
| Illinois | $4,000,000 | Up to 16% |
| Maine | $5,712,000 | 8% to 12% |
| Maryland | $5,000,000 | Up to 16% |
| Massachusetts | $1,000,000 | 0.8% to 16% |
| Minnesota | $2,400,000 | 13% to 16% |
| New York | $5,490,000 | Up to 16% |
| Oregon | $1,000,000 | 10% to 16% |
| Rhode Island | $1,540,000 | 0.8% to 16% |
| Vermont | $2,750,000 | 16% |
| Washington | $2,200,000 | 10% to 20% |
Here are the 6 states that currently tax inheritances:
| State | Exemption Level | Inheritance Tax Rates |
| Iowa | Family exemptions | Up to 15% |
| Kentucky | Family exemptions | 4% to 16% |
| Maryland | Many exemptions | 10% |
| Nebraska | Exempt to spouse/charity | 1% to 18% |
| New Jersey | Family exemptions | 11% to 16% |
| Pennsylvania | Exempt to spouse/charity | 4.5% to 15% |
Like most everything else with taxes, the key to winning the game is planning!