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2810 Fieldstream Drive North
Wilson, NC 27896
Phone: 252-237-4357
Fax: 252-243-2681
May/June 2018
State Taxes and Estate Planning
Many do not realize that state inheritance and estate taxes can take a bite out of an inheritance windfall. Some states have estate taxes, others call them inheritance taxes and one state even has both taxes.Two Taxes
Maryland is the state with both taxes. Its inheritance tax, however, exempts a number of family and non-family members, including a spouse, just as most tax jurisdictions will. For others, Maryland’s estate tax kicks in on taxable estates over $4 million.High to Low
A look at other estate taxes from coast to coast: Washington has a top rate of 20% that begins on estates over $2.1 million. Connecticut taxes estates worth as low as $2.6 million in 2018, but has a unique provision that caps gift and estate taxes at $15 million beginning in 2019, which primarily affects estates worth about $130 million. The majority of states, including Florida, Ohio and Texas, don’t have an estate tax.What to Do
If you haven’t prepared for how your state handles estate and inheritance taxes, now is a good time to talk to an estate planning attorney. Even without a tax, you may want to create an instrument like a living trust or irrevocable trust to keep the settlement of your affairs private. A will, of course, is the first thing most people should draw up and keep current to help an estate transfer run smoothly. If taxes will be an issue, there are a variety of tools that can help you pass more of your assets estate tax-free to heirs.
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