Estate Taxes by State: A Guide to Maximize Your Legacy Planning

As if it isn’t enough that the federal government wants to take a piece of your estate when you pass on, it’s likely that the state you live in — or even just own property in — wants to take its share as well. In certain states, it’s possible that between federal and state taxes, your estate could wind up giving more than half of its overall value to the government.

It’s easy for people to brush this off by saying, “Well, only 1% of the population is affected,” but if you’re one of the estimated 3 million individuals who will be impacted, it certainly doesn’t feel like a small problem. That’s why at Howard Kaye, we specialize in minimizing estate taxes for our clients, so your heirs can enjoy the funds you’ve amassed in your lifetime.

Currently, the federal government allows an exemption of $5.49 million per individual estate. Even if your estate is under that amount, that doesn’t mean you’re free and clear of estate taxes because many states have much lower exemptions. What’s more, your heirs may face inheritance taxes for property or money they receive from your estate. Currently, 14 states and Washington, D.C. have state-level estate tax and six states have an inheritance tax. Maryland and New Jersey residents are the hardest hit because these states have both.

Below is an at-a-glance resource that can tell you about estate taxes in each state. Click on your individual state for more information about specific estate tax laws that may impact your heirs. For guidance in estate planning to maximize your legacy, contact a life insurance advisor at Howard Kaye by calling 800-DIE-RICH today.

Estate Tax? Inheritance Tax? Estate Tax Threshold Maximum Tax Rate
Alabama None None None None
Alaska None None None None
Arizona None None None None
Arkansas None None None None
California None None None None
Colorado None None None None
Connecticut Yes No $2,000,000 12%
Delaware Yes No $5,490,000 16%
Florida None None None None
Georgia None None None None
Hawaii Yes No $5,490,000 16%
Idaho None None None None
Illinois Yes No $4,000,000 16%
Indiana None None None None
Iowa No Yes n/a 15%
Kansas None None None None
Kentucky No Yes n/a 16%
Louisiana None None None None
Maine None None $5,490,000 12%
Maryland Yes Yes $3,000,000 16% and 10% resp.
Massachusetts Yes No $1,000,000 16%
Michigan None None None None
Minnesota Yes No $1,800,000 16%
Mississippi None None None None
Missouri None None None None
Montana None None None None
Nebraska No Yes n/a 15%
Nevada None None None None
New Hampshire None None None None
New Jersey Yes Yes $2,000,000 16% for each
New Mexico None None None None
New York Yes No $3,125,000 16%
North Carolina None None None None
North Dakota None None None None
Ohio None None None None
Oklahoma None None None None
Oregon Yes No $1,000,000 16%
Pennsylvania No Yes n/a 15%
Rhode Island Yes No $1,500,000 16%
South Carolina None None None None
South Dakota None None None None
Tennessee None None
Texas None None None None
Utah None None None None
Vermont Yes No $2,750,000 16%
Virginia None None None None
Washington Yes No $2,078,000 20%
Washington, D.C. Yes No $1,000,000 16%
West Virginia None None None None
Wisconsin None None None None
Wyoming None None None None