For most of the United States, the estate tax is now something only the very wealthy have to plan for. The federal exemption for an individual this year is now $5.34 million, or $10.68 million for a married couple. And that amount is indexed to inflation, so it will continue to rise. The exception is in the 16 states, mostly in the North, where state estate taxes remain and ensnare middle- and upper-middle-class residents — the very people the high federal exemption was supposed to protect. Laura Kelly, partner at McCarter & English said, “It’s ironic because you’d think families with smaller estates don’t need a complicated estate plan. But these are the families that can least afford to pay the tax. If you have a credit shelter trust to get the New Jersey exemption, the surviving spouse can have access to it and get the rest.”
Click to read the full article: Some States Are Moving to Loosen Their Estate Taxes (subscription required)