With the federal estate tax exemption at $15 million, many advisors save estate planning conversations for the ultra-wealthy. That misses a large group of families who are well below the federal exemption and still face a state estate or inheritance tax. Oregon's threshold is $1 million, Massachusetts' is $2 million, Minnesota's and Washington's are $3 million, Illinois' is $4 million, and Maryland's and Vermont's are $5 million. Several states impose top rates of 16 percent or more.
A family with a $3 million or $7 million estate may have no federal problem and a real state problem. That creates an earlier planning trigger, and properly structured irrevocable trusts are often the answer. The planning conversation should not stop at the federal exemption.
The full piece, with how inheritance taxes differ from estate taxes and why domicile and property location both matter, is at turnipseed.law.
