Changes in the Law Change Where it’s Best to, Um, Die
Death may be a certainty, but the taxes attached to departing this veil of tears are anything but.
“When it comes to state death taxes, nothing’s certain,” according to a recent article on Forbes.com.
Entitled “Where Not To Die In 2013 Update,” the piece described changes in the law in various states that have had an impact on estate taxes.
“ In the spring legislative season: Indiana made the repeal of its inheritance tax retroactive to Jan. 1; Delaware decided not to let its temporary estate tax sunset on July 1; and Minnesota tweaked its estate tax to apply to non-residents who own property there through pass-through entities, and it added a gift tax,” the story points out. “Meanwhile, North Carolina is poised to be the next state to do away with its estate tax as its legislature grapples with major tax reform in the coming weeks. That would bring the tally of states where you have to worry about a separate state estate or inheritance tax down to 19 states plus the District of Columbia.”
“Each state is looking at the state estate tax based on revenue considerations,” Charles D. Fox IV, an estate lawyer with McGuire Woods in Charlottesville, Va., was quoted as saying.
If the repeal does go through in North Carolina, it would be retroactive to the first of the year, the same as in Indiana.
“It’s a great bill because of automatic repeal,” Palmer Schoening, a conservative strategist who publishes the Family Business Report, told Forbes.com. “North Carolina prides itself on being a bastion for retirees, but as it stands now their state isn’t friendly with respect to death taxes.”
Some states are moving in the opposite direction along the lines of Delaware’s extension of its expiring estate tax, according to the article.
“And Minnesota, with an estate tax with a $1 million exemption, made a significant change by adding a state-level gift tax that kicks in on gifts above $1 million. That makes it the second state to have a gift tax. Connecticut is the other; its gift tax kicks in at $2 million.
Minnesota also is trying to grab more revenue with tweaks that will disallow common ways folks now get around state death taxes. The new law pulls gifts made within three years of death back into the estate, and it requires non-Minnesota residents who own property in the state via a pass-through entity like a trust or partnership to include the value of that property in their estate for Minnesota estate tax purposes.”