• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Thompson Law, PLLC

Estate & Business Planning Attorneys in Sioux Falls, South Dakota

605-362-9100
Estate Planning Attorneys Licensed in Iowa, Minnesota, Nebraska and South Dakota
  • Home
  • Our Firm
    • About Our Firm
    • Client Testimonials
    • Employment Opportunities
    • Our Team
  • Services
    • Asset Protection & Business Planning
    • Elder Law & Medicaid Services
    • Estate and Gift Tax Figures
    • Estate Planning Review
    • Estate Planning Services
    • Family-Owned Businesses & Farms
    • Incapacity Planning
    • IRA & Retirement Planning
    • Legacy Planning
    • LGBTQ Estate Planning
    • Pet Planning
    • SECURE Act
    • Special Needs Planning
    • Succession Planning
    • Trust Administration & Probate
  • Español
    • Sobre Nuestra Firma
    • Administración de Fideicomisos y Sucesiones
    • Servicios de Planificación Patrimonial
    • Protección de Bienes & Planificación Empresarial
  • Reports
    • Advanced Estate Planning
    • Basic Estate Planning
    • Estate Planning for Niches
    • Trust Administration
  • Resources
    • DocuBank
    • Elder Law Reports
    • FAQs +
      • Estate Planning
      • Families Without an Estate Plan
      • Legacy Wealth Planning
      • LGBTQ Estate Planning
      • Trust Administration & Probate
    • Newsletters
    • Professional Resources
  • Seminars
  • Contact Us
  • Blog

When and Where You Die Matters

May 29, 2019 by Thompson Law

The federal estate and gift tax exclusion is set “permanently” to $5 million, adjusted for inflation. However, if you die between now and the end of 2025, the exclusion is doubled to $10 million, adjusted for inflation. Its inflation adjusted to $11.4 million in 2019. But, the federal estate and gift tax is the same regardless of where you live when you die. You could die in Paris, France, or Paris, Texas, and the federal estate tax bill would be the same. However, about 1/3 of the states currently have a state estate or inheritance tax. Here’s a link to more information.

If you were to die in 2019, you would owe no federal estate tax unless your assets exceeded $11.4 million. However, if you were to die while resident in Massachusetts or Oregon, you’d owe state estate tax on the amount exceeding $1 million (if you didn’t have applicable deductions).

In 2001, federal law removed a credit for state estate taxes. Since that time, many states have ceased to have a state estate tax. The trend may be reversing. Recently, a bill was introduced in the California Senate, S. 378, which would put on the ballot a measure to institute a state estate, gift, and generation-skipping transfer tax. The amount which could be passed free of tax would be $3.5 million (not adjusted for inflation). The rate of taxation above that threshold would be 40%. There would be a credit for all federal taxes paid.

If the proposed California state estate tax were implemented, a taxpayer who died resident in California would pay 40% of the excess over $3.5 million. If the federal exclusion were $11.4 million, like today, the tax on the difference between the state exclusion and the higher federal exclusion would go to the state coffers and the tax on the amount above the federal exclusion would go to the federal coffers. Since the rate would be exactly the same, it would just serve to lower the threshold for taxation sending the tax on the lower amounts to California.

Where you decide to live is an important choice. It impacts your weather, your relationships, your cost of living, and your income tax rate during life. It also impacts on the amount of tax on your estate.

Stephen C. Hartnett, J.D., LL.M.
Director of Education
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128

—

Read the original article at aaepa.com

  • Author
  • Recent Posts
Thompson Law
Follow
Thompson Law
Founded in 2003, Thompson Law, PLLC is a professionally licensed and accomplished estate planning law firm. We provide comprehensive, tailored estate planning services through the use of living trusts, wills, powers of attorney, living wills, irrevocable trusts, family limited partnerships, and charitable gifting strategies. Thompson Law helps families preserve their wealth for future generations, minimize estate taxes, and avoid the expense of extended probate.
Thompson Law
Follow
Latest posts by Thompson Law (see all)
  • Knutson becomes Certified Farm Succession Coordinator - June 27, 2022
  • Knutson named 2021 Great Plains Rising Star - August 4, 2021
  • When it’s time to sell the family business – including to family – keep tax strategy in mind - March 24, 2021

Filed Under: Legal Education, Estate Planning Tagged With: estate tax, gift tax, inheritance tax, state estate tax

Primary Sidebar

News Categories

  • Video
  • Legal Education
  • Estate Planning
  • Event
  • Coffee with Carolyn
  • Estate Planning
  • Attorney
  • General

Sign-Up to Receive Email Updates

Follow Us

  • Facebook
  • LinkedIn
  • YouTube

Thompson Law, PLLC

Thompson Law, PLLC.
5027 S. Western Avenue
Sioux Falls, SD 57108
Phone: 605-362-9100
Fax: (605) 362-9101

Footer

Footer Logo

The information on this website is for general information purposes only. Nothing on this or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. This information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.

Privacy Policy | Terms of Service | Disclaimer | Site Map | Powered by American Academy of Estate Planning Attorneys

© 2022 Thompson Law, PLLC, All Rights Reserved.