State Laws: Estate Taxes

State Estate or Death Taxes: Paid by the Estate

A number of states impose estate taxes on any real estate owned by a decedent within the state, and on the personal property of deceased residents of the state. One tax rate may apply to all assets in the estate, or the rate may vary depending upon who receives what property. For example, a state may impose a lower tax rate on property left to a child, as compared with property left to a distant cousin. It is important to note that a few states are in the process of phasing out their estate tax systems.

State Inheritance Taxes: Paid by the Recipient of Property

In states that carry inheritance tax laws, taxes must be paid by the person who receives inherited property (as opposed to estate taxes which are paid from the decedent's estate). Inheritance tax exemptions and rates may vary depending on who received the property, i.e. the decedent's spouse may be taxed at a lower rate than would be a friend of the decedent. A number of states are phasing out their inheritance tax systems.

"Pickup" Tax

Keep in mind that most states, even if technically carrying estate or inheritance tax laws, in practice follow what is known as a "pickup" system of taxation at the time of the decedent's death. Under this system, while a state tax return must be filed on behalf of the estate (or by a recipient who inherits property), the state's share of the tax comes out of what the estate is already paying the IRS. In other words, in most states no tax will need to be paid beyond the amount that is already being paid to the federal government.

What's Below?

In the table below, where applicable you will find links and citations to estate, inheritance, and similar taxation laws for all 50 states and the District of Columbia. Visit FindLaw's Estate Planning section for additional articles and resources.

Learn More About Your State's Estate Taxes by Contacting an Attorney

The intersection between property and tax laws is extraordinarily complex and a lawyer's assistance can help avoid critical missteps. If you're in the midst of estate planning, or an estate tax is threatening your inheritance, it's a good idea to contact a local tax attorney to learn how to protect your assets.