LLG Blog

Monday, July 30, 2018

Estate Planning Pitfall


Estate Planning Pitfall

You’re not paying enough attention to state estate tax laws

The Tax Cuts and Jobs Act (TCJA) provides greater flexibility in estate planning for many taxpayers. Under the TCJA, the federal gift and estate tax exemption is increased from $5 million to $10 million, subject to inflation indexing. The indexed amount for 2018 is $11.18 million.

The exemption is effectively doubled to $22.36 million for a married couple. Thanks to the portability provision, the estate of a surviving spouse can utilize the unused portion of the exemption from the estate of the first spouse to die.

So, no more estate tax worries for most people, right? Not so fast. For residents of some states, state estate or inheritance taxes can still present a significant problem.

Currently, 12 states and Washington D.C. impose an estate tax, while six have an inheritance tax. Maryland is the only state with both. Of those states with estate taxes, Washington maintains the highest rate at 20%, while Nebraska has the loftiest inheritance tax rate at 18%. Generally, the state estate tax exemptions on the books are lower than the federal exemption of $11.18 million.

In recent years, several states have moved away from taxing the estates of their residents, including New Jersey, which completed the phase-out of its estate tax repeal in 2018. But the trend could reverse quickly, as states search for ways to make up revenue shortfalls in the wake of the TCJA.

Lesson to be learned: Don’t assume you’re completely in the clear on estate taxes.

Archived Posts


Littorno Law Group assists clients throughout Contra Costa County from our offices in Pittsburg, Pleasant Hill and Rancho Bernardo, California, including Antioch, Brentwood, Clayton, Concord, Lafayette, Moraga, Martinez, Danville, San Ramon, Pleasanton, Livermore, Fremont, Oakland, Piedmont, San Diego, San Mateo, Escondido, San Marcos, Vista, Oceanside, Carlsbad, Fallbrook, Bonsall, Encinitas, La Jolla, Poway, Rancho Bernardo, Del Mar, and the surrounding areas and suburbs.

© 2023 Littorno Law Group | Disclaimer
2211 Railroad Ave, Pittsburg, CA 94565
| Phone: 800.689.4211 | 925.432.4211
16935 West Bernardo Drive, Rancho Bernardo Courtyard, #100 East Lobby, San Diego, CA 92127
| Phone: 800.689.4211 | 760.525.3140
3478 Buskirk Avenue, #1000, Pleasant Hill, CA 94523
| Phone: 800.689.4211 | 925.937.4211
1900 S. Norfolk, Suite 350, San Mateo, CA 94403
| Phone: 800.689.4211

Estate Planning with Revocable Living Trusts | Trust Administration | Probate Estate Administration | Elder Law and Medi-Cal Planning | Veteran's Benefits | Prepaid Legal Plans | Advanced Estate Planning | Planning for Children | Estate Litigation | IRA Beneficiary Trusts | Littorno Law Trust Maintenance Program | Estate Tax Planning | Estate Planning/Non-Traditional Families | Pet Trusts | Contact | Staff | Library

FacebookLinked-In Company

Law Firm Website Design by
Amicus Creative

Make a Payment