STATE ESTATE TAXES ARE IMPORTANT TO CONSIDER!

Most Americans aren’t too concerned about federal estate taxes. After all, 99.8 percent won’t have estates large enough to be subject to the tax. For 2016, the estate tax threshold is $5.45 million (double that amount for a married couple) and it is expected to be $5.49 million in 2017 (barring any changes to the tax code).

At the state level, it’s a different story. Kiplinger’s explained:

“However, state estate taxes, which kick in for estates valued at only $1.5 million or less in several states, could take a big bite out of your legacy. Your home and retirement accounts will be counted when your estate is valued for tax purposes, and proceeds from your life insurance could be counted, too, depending on how the policy is owned and who gets the money.”

The Tax Foundation reports, in all, 15 states and the District of Columbia have estate taxes. They included:

• Connecticut ($2 million exemption and 7.2 percent to 12 percent estate tax rates)
• Delaware ($5.4 million exemption and 0.8 percent to 16 percent estate tax rates)
• Hawaii ($5.4 million exemption and 0.8 percent to 16 percent estate tax rates)
• Illinois ($4 million exemption and 0.8 percent to 16 percent estate tax rates)
• Maine ($2 million exemption and 8 percent to 12 percent estate tax rates)
• Maryland ($1.5 million exemption and 16 percent estate tax rate)
• Massachusetts ($1 million exemption and 0.8 percent to 16 percent estate tax rates)
• Minnesota ($1.4 million exemption and 9 percent to 16 percent estate tax rates)
 New Jersey ($675,000 exemption and 0.8 percent to 16 percent estate tax rates)
• New York ($3.1 million exemption and 3.1 percent to 16 percent estate tax rates)
• Oregon ($1 million exemption and 0.8 percent to 16 percent estate tax rates)
• Rhode Island ($1.5 million exemption and 0.8 percent to 16 percent estate tax rates)
• Tennessee ($5 million exemption and 5.5 percent to 9.5 percent estate tax rates)
• Vermont ($2.75 million exemption and 0.8 percent to 16 percent estate tax rates)
• Washington ($2.1 million exemption and 10 percent to 20 percent estate tax rates)
• Washington DC ($1 million exemption and 0.8 percent to 16 percent estate tax rates)

While not all have estate taxes, Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania all have inheritance taxes. If you haven’t given much thought to estate planning, contact your financial professional. They can possibly help you find ways to minimize the taxes your estate and your heirs may owe.

Weekly Focus – Think About It

“Success is not final; failure is not fatal: It is the courage to continue that counts.”

–Winston S. Churchill, Former British Prime Minister

Sources:

http://www.usnews.com/news/politics/articles/2015/04/14/fact-check-estate-tax-hits-fewer-than-1-percent-of-estates

https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-estate-taxes?_ga=1.256260876.623466591.1477767498#amirequired

http://www.kiplinger.com/slideshow/taxes/T021-S003-states-with-the-scariest-death-taxes/index.html

http://taxfoundation.org/blog/does-your-state-have-estate-or-inheritance-tax

http://www.inc.com/jayson-demers/51-quotes-to-inspire-success-in-your-life-and-business.html

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