Indiana Inheritance Tax
Indiana inheritance tax was eliminated as of January 1, 2013. As a result, Indiana residents will not owe any Indiana state tax after this date with respect to transfers of property and assets at death.
Federal Estate Taxation
The federal estate tax exemption has fluctuated significantly over the past decade. Currently, no federal estate tax is due on the transfer upon death between spouses.
Currently, Federal tax laws exempt up to approximately $5 million for an individual or approximately $10 million for a couple before estate tax kicks in. This amount increases each year; please consult us if you need to know the exact amount.
In determining whether this limit has been reached, all taxable gifts made over a lifetime must be considered. Once the estate tax is applicable, the rate can be up to 35% of the estate. Gifts made to spouses and to tax-exempt charities are free from estate taxation.
Because of the high threshold before estate tax kicks in, most Indiana residents won’t require sophisticated estate planning for estate tax minimization. However, if you have a large estate and are interested in making sure as much of your assets as possible are transferred to your beneficiaries (rather than the federal government), please call us so that we help you take advantage of effective tax planning possibilities.