UPDATE: Here are the 20 most expensive places in America to die
By Bill Bischoff
President Trump's proposed tax plan would eliminate the federal estate tax
With the current relatively generous federal estate tax exemption of $5.49 million for 2017 -- doubled if you are married -- most folks are free of any federal estate tax worries. Also, President Trump's proposed tax plan (http://www.marketwatch.com/story/here-are-the-20-most-expensive-places-in-america-to-die-2017-04-18) would eliminate the federal estate tax. And 30 U.S. states have no estate or inheritance taxes. That's the good news, at least for those who don't want to pay it.
The bad news? Some 20 states and the District of Columbia currently impose their own estate or inheritance taxes, or both, for 2017, and some of them have exemptions well below the federal amount. If you live in one of these jurisdictions, you could be exempt from the federal estate tax but still exposed to a significant state death tax hit.
Also see:5 surprising items you can deduct from your income tax returns (http://www.marketwatch.com/story/5-surprising-things-you-can-deduct-from-your-income-taxes-2015-02-27)
On Wednesday, a group of 130 individuals -- including Robert Crandall, the former chairman of American Airlines (AAL), Arnold Hiatt, former CEO of Striderite and Leo Hindery Jr., former CEO of AT&T (T) -- released a letter (https://defendestatetax.com)saying estate tax is only paid by a small fraction of the wealthiest Americas. "Now during a time of stunning wealth inequality, Congress wants to abolish the tax," Morris Pearl, chairman of the group and former managing director at BlackRock.
Given state-level estate taxes, however, you may want to be careful where you die. If you are considering moving to avoid state death taxes, be sure to consider all the potential tax hits in the new state, including those that will pertain while you are still alive. Finally, if you decide to move to a lower-tax state, be sure to do what it takes to establish that you are no longer a legal resident of your old higher-tax state. Otherwise, your old state may claim that you still owe taxes back there.
14 states and D.C. have their own estate taxes