Estate & Inheritance Tax
States With Estate Tax
- New York
- Maryland (both)
- Rhode Island
- Washington DC
States With Inheritance Tax
- New Jersey
- Maryland (both)
As tax rates change periodically, you’ll want ask your accountant or tax preparer what tax rate you may be liable for, where either estate and/or inheritance taxes are concerned. Six states impose inheritance taxes, and Maryland imposes both estate and inheritance tax. Thirteen states impose estate taxes, including the District of Columbia (Washington DC), and collect tax revenue from heirs – not from the estate itself, as with inheritance taxes.
Reducing Estate Taxes
Inheritance taxes are frequently determined by an heir’s relationship to a decedent. For example, the surviving spouse of a decedent is exempt from inheritance tax in every state. Some states impose taxes on a decedent’s children, but at a low rate. Generally, the more “distant” a relative is, the higher that heir’s inheritance taxes are… Moreover, heirs that are not related at all to a decedent will pay an even higher inheritance tax rate.
Spending or lowering your assets to lower taxes:
- If you’re not worried about going broke – spend your money now, while you’re still alive;
- Use some taxable cash for gifting people in your life;
- Use deductions allowed, giving away assets to charities;
- Shelter your assets and cash in a trust;
- Relocate to a state without estate or inheritance taxes.
Naturally, before you go down any of these avenues – consult with a tax attorney and possibly an accountant, to make sure you have your facts straight; and be certain you ask their professional opinion on how short term taxable capital gains and long term taxable capital gains may affect your heirs, at the federal and/or state level.
Heir Cash Now receives a good number of calls every month from heirs and beneficiaries requesting information on inheritance taxes and estate taxes. However, Heir Cash Now specializes in inheritance loans, probate loans and estate loans, not inheritance or estate taxes, and so the firm must suggest that heirs or beneficiaries with tax questions consult with their accountant or tax attorney. Heir Cash Now specializes in inheritance advance funding exclusively, therefore we are unable to answer questions regarding taxes of any kind.