♠ Posted by Marc J. Soss in estate plan,florida estate planning,florida probate attorney,florida probate lawyer,Last Will and Testament,Revocable Trust at Tuesday, November 04, 2014
While it is not unusual for
states to claim that they are the best place to live or have the best beaches. However, states
are now promoting themselves that they're also great places to die. In
2015, four states will increase the amount that's exempt from state estate taxes, reducing or eliminating the tax that heirs will owe. On January 1, Tennessee's estate tax exemption will jump to $5 million
from $2 million, Maryland's exemption will increase to $1.5 million from $1
million, and Minnesota's exemption will rise to $1.4 million from $1.2 million.
On April 1, 2015, New York's estate tax exemption will increase to $3.125
million from $2.062 million. All still well below the federal estate tax exemption amount.
In 2016, Tennessee's estate tax will disappear, Maryland and New York
will increase their exemption thresholds every year until 2019 (when they'll match the
federal exemption amount) and Minnesota's exemption will rise in
$200,000 annual increments until it reaches $2 million in 2018. These changes are important because taxes are one of the most common reasons, besides the weather, retirees relocate to another state.
Currently, 14 states and Washington, D.C., have state exemption amounts below the federal threshold, with
maximum tax rates ranging from 12% to 19%. New Jersey's estate tax threshold is just $675,000,
which could affect heirs of relatively modest estates. Seven states have an
inheritance tax, with maximum rates ranging from 9.5% to 18%. Unlike an estate
tax, which is levied on an estate before it's distributed, an inheritance tax
is typically paid by the beneficiaries. Maryland and New Jersey have both
estate and inheritance taxes.
One of the biggest reasons people live in Florida is because it has NO estate tax (only the federal applies). If you already have
a comprehensive estate plan, make sure it's regularly updated to reflect revisions in your
state's law. More changes are likely as states try to make their jurisdictions
more attractive to retiring baby boomers. For example, legislation has been
introduced in New Jersey to phase out the state's estate tax over a five-year period.
