State Estate Taxes

Many people may think that now that the federal estate tax exemption is $5million they are free of worry about the estate tax. If so, they are wrong. Why?

1. the exemption is only for 2011 and 2012; it returns to $1million in 2013 unless Congress takes action (which it probably will);
2. some states have a state estate tax that kicks in below the $5million mark; and
3. some states have inheritance tax laws.

Wisconsin is not one of the states listed in bullets 2 and 3, however, I always advise clients that they should monitor the news....one never knows when the State will opt to tax estates again.

Remember, there are 50 different states in our country. That means there are 50 different sets of estate planning laws. You must determine what laws impact you in your state. It is always wise to consult an attorney in your state who focuses on estate planning.

For more on the states that do have a lower threshold for estate taxes, SmartMoney has a nice article.