Don’t Underestimate State Estate Taxes

Today’s federal estate tax exemption is quite generous compared to historical standards. However, for families that reside in any of the 18 states, or the District of Columbia, that levy their own estate taxes, there may be significant ramifications for failing to plan their estate. The current federal estate tax exemption is set at $5.49 million. Some states have estate tax exemptions set much lower, starting at $1 million. A simple example, a taxpayer dying in Oregon with an estate valued at $5.49 million would owe no estate tax to the federal government. But, with a $1 million threshold, which is what Oregon allows for exemption, the decedent in this case would owe over $480,000 in state estate tax. There are a number of means to mitigate these taxes, and it is advisable to seek out the opinion of a financial or estate planning expert for help in this area.

See Kevin Duncan, Don’t Underestimate State Estate Taxes, Fiduciary Trust International, June 1, 2017

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.