State Estate Taxes

In addition to federal estate taxes, most of us also face the dreaded prospect of having to pay state estate taxes. Even if you live in a state that does not impose in each state tax, you may have assets located in a state that does have any state tax.

Historically, instead of imposing their own completely separate estate tax, most governments opted to share in the estate taxes collected by the federal government. The government referred to this method of sharing with states as a pick up tax period in reality, it was a kick back to the states of a portion of the tax the federal government collected.

Federal law illuminated the pickup tax which resulted in a drastic cut in the amount of revenue that the states received from estate tax period many states, having become accustomed to receiving this extra money each year from the federal government, have subsequently established their own state death tax laws to enable them to continue to collect the tax. While some states have abolished state estate taxes, others continue to impose the tax appan land and property you own at death. In many instances state taxes may take a small but annoying bite out of your estate. But in some states, death taxes can be steep.

How will these state taxes affect me?

First, the state imposed taxes will be assessed regardless of what Congress does on the federal level. Therefore, if you desire to pass your state without losing a substantial amount in a state taxes, me to plan to avoid stateless state taxes in addition to any federal estate tax period and contact a real estate lawyer to manage the movements.

If you expect to leave an estate worth less than the exempt level established by both the federal and state governments, you may not need to worry about death taxes. However, each state sets its own exemption amount, which is subject to change at anytime. If you have an estate larger than the exempt amount, or you are planning to leave your property to your spouse, who may then have an estate is exceeding the exempt level, you may wish to learn more about how to reduce estate taxes to lowest possible amount.

Second, the new state inheritance taxes have made estate planning much more challenging period formerly, estate planning was needed to avoid just the federal estate tax, but now a state planning must simultaneously take both taxes into consideration. This is not a simple task since the two tax codes can follow different rules. Planning to avoid one tax could trigger the other period for example, if your state plan is designed to avoid the minimum possible amount of federal estate taxes, it might trigger a state a state tax at the death of the first spouse in those states where the state exemption is lower than the federal exemption. Conversely, if your plan is designed to completely avoid state estate taxes it could sacrifice your ability to avoid federal estate taxes.

The decision as to which of these two taxes to avoid is an individual one that needs to be taken into account your families planning goals, as well as the tax consequences of planning to avoid one tax versus the other period you must make a well informed decision that best protects your family. A qualified estate planning attorney will be needed to help you sort through these complex issues and help you evaluate whether a state death tags will apply to your situation.

About Us

The lawyers of Ross Estate Planning, LLC draw on a strong and diverse body of expertise and experiences.  We are well equipped to handle all areas of retirement and estate planning, and we are serious about solidifying the futures of our clients. We have dedicated our careers to fighting for the future our clients. If you or someone you care about is looking for answers about retirement, please do not hesitate to contact us for a consultation. We believe in carefully evaluating every case that comes through our door.  Consultations are always free.


  • Chapter 1
  • Chapter 2
  • Chapter 3
  • Chapter 4
  • Chapter 5
  • Chapter 6
  • Chapter 7
  • Chapter 8
  • Chapter 9
  • Chapter 10
  • Chapter 11
  • Chapter 12
  • Chapter 13
  • Chapter 14
  • Chapter 15
  • Chapter 16
  • Chapter 17
  • Chapter 18

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This book addresses important estate planning ideas for individuals and business owners.  Although it is intended to provide a general introduction to the legal, accounting, tax, financial planning and investment issues that affect your estate plan, you should not rely upon this book as your sole source of information and advice for these important topics.  Changes in the law, or in the interpretation of such laws, occur frequently and such changes made after this manuscript was completed may affect the recommendations made by the authors.  Also, the recommendations made herein are general in nature, and therefore, may not be suitable for every reader.

A reference book like this should never be seen as a substitute for professional assistance.  Legal, accounting, tax, financial planning, investment or other advice should be obtained from a competent professional in that specific profession.  We recommend that for your estate planning needs you consult with one of the Contributing Authors listed after the Introduction.  These attorneys dedicate their legal practices to working with families to design and implement estate plans that meet each family’s individual needs and desires.  Your family’s situation is unique and should receive individual attention.