Death and Taxes by State

Federal estate tax now only kicks in if the individual's estate exceeds $5.25 million which exempts most estates from the death tax. This is also true in 29 states including Georgia that have no state estate or inheritance taxes. Maryland and New Jersey get the prize because they impose both an estate tax and inheritance tax. Wealthy taxpayers there need to move before they die. Six states only impose an inheritance tax. Generally, inheritance taxes are levied on  recipients who are not direct relatives. For example, Maryland charges a 10% inheritance tax on all money paid to a niece, nephew, friend or other unrelated person, but none to children, grandchildren or spouse.  19 other states and the District of Columbia have an estate tax that generally starts after a $1 million exemption and a top rate of 16%. Illinois is the most recent state to impose an estate tax with a $4 million exemption effective 1/1/2013.