Saturday, November 19, 2011

The state of state estate taxes

No one, it seems, pays attention to state-level estate or inheritance taxes when talking about what can pass to one's heirs free of tax on death. The North Carolina Estate Planning blog provides a list of the 19 worst states to die in - the states which have the lowest exemption amounts or the highest tax rate, as either estate tax (imposed on estates before distribution) or inheritance tax (imposed on beneficiaries when they receive the funds).

Michigan currently has neither an estate tax or an inheritance tax. To quote Shel Silverstein, Michigan "is tough on the living", but it leaves the dead pretty much alone.

The Federal government currently applies a $5 million per person exemption to its estate tax. There is no Federal inheritance tax.

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