Tuesday, January 8, 2019
Though the estate tax exemption now only applies to the wealthiest of individuals, there are still 17 states and D.C. that impose state either an state tax or an inheritance on their citizens. Some states apply the tax for all estates, some are only for larger estates. Maryland is the only state that applies both taxes. Several states rebelled when the exemption increased drastically, and have their own amounts far below the federal level. If you are in a state that has a minimum and you are nearing the cliff of having to pay out, proper estate planning is vital.
In New York state, individuals can make deathbed gifts starting in 2019 without the assets being applied toward the decedent's estate. The exclusion amount in New York is $5.47 million, approximately half of what the increased federal estate tax exemption is under the Tax Cuts and Jobs Act. So to stay under the exemption amount, a New Yorker no longer has to gift items three years out - in can be at the time of their demise.
Connecticut is the one state that could potentially have an exemption amount that’s higher than the federal exclusion amount—in 2026. For 2019, it’s set at $3.6 million, then scheduled to increase to $5.1 million in 2020, $7.1 million in 2021, $9.1 million in 2022, and to match the federal exemption amount in 2023.
See Ashlea Ebeling, Where Not to Die in 2019, Forbes, December 12, 2018.
Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.