Death and Taxes: The 15 States With the Highest Death Tax Rates in America

In life, the only certainties are death and taxes. And with President Donald Trump pushing for tax reform, taxes are in the news as much as ever. One of the buzzwords the congressmen and senators working on the legislation love to bring up are estate and inheritance taxes, also known as “death taxes.”

There’s no doubt people hate paying taxes (who wants to give up their hard-earned money?) and they come up with creative ways to avoid paying. Paying when you’re dead sounds lousy, but the Center on Budget and Policy Priorities notes that just 2 of every 1,000 estates (0.002%) is actually impacted by the $5.49 million federal estate tax. On top of the federal estate tax, a fraction of the states actually impose their own death tax. The long and short of it is, you need to be a very wealthy person in a select few states to be affected. However, that federal estate tax is in play no matter where you live. We are discussing states that take a little something extra.

The government still wants its cut of your money even when you’re dead. These are the 15 states taking the most estate taxes. We’ll start at the low end, reach some middle ground, and then head to the state taking the most.

15. Connecticut

Hartford, Connecticut skyline

Residents of Hartford might need to worry about Connecticut’s estate tax. | SeanPavonePhoto/ Getty Images Plus

  • Estate tax rate: 12%

Our first state on the list is similar one way to almost all the others in one way: It has a progressive scale that determines the estate tax rate. On the low end, the rate is 7.2%. The tax kicks in for estates valued at $2 million or more. It caps out at 12%, according to data from the Tax Foundation.

Next: Let’s stay up north for our next stop.

14. Maine

lubec, maine

Maine is one of the few states imposing an estate tax, but at least it’s simple. | Don Emmert/AFP/Getty Images

  • Estate tax rate: 12%

Estates valued at the federal threshold of $5.49 million and up to $8.49 million are charged 8% in Maine. It’s not until you get up to $11.49 million that the 12% rate kicks in. In the middle is a $240,000 tax plus 10% of anything between $8.49 and $11.49 million.

Next: A place where the estate tax and income are kept separate.

13. Hawaii

Kalalau trail in Kauai, Hawaii

Dying in the lush paradise that is Hawaii will cost you. | maximkabb/iStock/Getty Images

  • Estate tax rate: 15.7%

The maximum rate in Hawaii comes in at 15.7% for an estate valued at $5.49 million or more. In a neat twist, Hawaii doesn’t charge descendants any income tax on money inherited from an estate worth less than that. The thinking is, earning money that way is not an everyday, run-of-the-mill kind of way of doing things. Hence, no income tax is taken.

Next: The middle ground, where all the states have 1 thing in common.

12. Delaware

Wilmington Delaware skyline along the Riverfront at night

Delaware’s estate tax will soon be gone. | pabradyphoto/iStock/Getty Images

  • Estate tax rate: 16%

This death tax is going the way of the Dodo very shortly. The first day of 2018 sees Delaware doing away with its estate tax. Until it goes away for good, the variable estate tax rate maxes out at 16% and only applies to estates valued at $10.04 million or more.

Next: Estate tax does little to help the budget woes in this place.

11. Illinois

Illinois Governor Bruce Rauner

Governor Bruce Rauner will be subject to the Illinois estate tax when he dies. | John Gress/Getty Images

  • Estate tax rate: 16%

Illinois imposes an estate tax starting at anything valued at $4 million, so you can be charged even if the estate comes in under the federal threshold. It’s a sliding scale and only the most valuable estates have 16% taken by the state. But even that lower threshold of taxation is doing little to stem the Illinois budget crisis.

Next: One state, two death taxes.

10. Maryland

Maryland state capitol

The Maryland state capitol, where they decide how much money to take when you die.  | Jim Watson/AFP/Getty Images

  • Estate tax rate: 16%

Maryland is in the process of slowly adjusting its estate tax numbers. For 2017, it kicks in at $3 million. It will go up to $4 million in 2018, and thereafter it will mirror the federal exemption level. The is one of two states on this list (we’ll get to the other in a minute) that have an estate tax and an inheritance tax on the books. Any money you inherit, even if it’s a $10 dollar bill, is subject to the state inheritance tax as there are no exemptions.

Next: Simple math for estate planners in our next location.

9. Massachusetts

University of Massachusetts in Amherst, Massachusetts

Estate tax math is simple in Massachusetts. | UMass.edu

  • Estate tax rate: 16%

Estate taxes, or at least the math, doesn’t get any easier than it does in Massachusetts. If the estate you leave behind is valued at $1 million or less, there are no taxes taken. Above $1 million, it’s a sliding scale topping out at 16%.

Next: Exemption going up, and the governor’s not happy.

8. Minnesota

Minneapolis downtown skyline

Minnesota could lose millions from its reworked estate tax code. | iStock.com/RudyBalasko

  • Estate tax rate: 16%

Like we saw a minute ago with Maryland, Minnesota is adjusting its estate tax numbers. What was originally a $1.8 million threshold for 2017 was retroactively moved to $2.1 million. The amount that triggers the estate tax will increase by $300,000 until it reaches $3 million. Minnesota will miss out on quite the payday, much to the governor’s discontent. In 2016, it took in $183.2 million in estate tax revenue.

Next: Former governor did at least some good.

7. New Jersey

Chris Christie on April 3, 2017 in Palm Beach, Florida.

Chris Christie axed the estate tax before he left office. | Getty Images

  • Estate tax rate: 16%

Remember when we visited Maryland and mentioned just one other state has both estate and inheritance taxes? Well, New Jersey is that state, at least for the time being. Former governor Chris Christie might be one of the most hated governors of all time, but wealthy New Jerseyans might have done a dance when he axed the estate tax in 2016. It will be gone as of 2018. The inheritance tax is still alive, but money left to grandparents, parents, spouses, or children is exempt. Even then, only gifts over $25,000 are taxed.

Next: Rising exemptions on the way in this state.

6. New York

Big changes have been taking place with New York’s estate tax. | iStock

Estate tax rate: 16%

Tax codes are always changing, and in New York in 2014 the estate tax underwent some big changes. Starting that year, scheduled increases raised the exemption threshold to $5.25 million through 2018. After that, it will mirror the federal threshold. The progressive rate maxes out at 16%.

Next: Low threshold in our next destination.

5. Oregon

It takes just $1 million to have to pay Oregon’s estate tax. | www.facebook.com/travelportland

  • Estate tax rate: 16%

Among states on this list, Oregon has one of the lowest thresholds that kick in the estate tax. It starts at $1 million taxed at 10%, and the rate steadily increases, maxing out at a 16% rate.

Next: The same old song and dance

4. Rhode Island

Providence, Rhode Island

The estate tax exemption is rising in Rhode Island. | Sean Pavone/iStock/Getty Images

  • Estate tax rate: 16%

We’ve seen this story before on this list. Rhode Island’s threshold to enact the estate tax keeps going up. It increased to $1,515,156 million at the start of 2017. Like most of the other states we’ve seen, it’s a progressive tax and the highest rate of 16% applies only to the largest estates.

Next: Changing laws will soon impact estates in this area.

3. Washington, D.C.

Washington DC, USA skyline

The estate tax in Washington, D.C., will soon follow the federal guidelines. | Sean Pavone/iStock/Getty Images

  • Estate tax rate: 16%

Like anything tax-related, there are many ins and outs when it comes to the estate tax in Washington, D.C. One law firm made a handy chart to track it all, but the simplistic version is D.C. estates valued at $2 million or less pay no additional taxes. It’s the estates worth $10 million or more than pay at the 16% rate. Soon, the district’s exemption level will match the federal level.

Next: Another state at 16%, but with one major difference.

2. Vermont

Stowe, Vermont

There is no progressive estate tax rate in Vermont. | DonLand/iStock/Getty Images

  • Estate tax rate: 16%

Vermont is different from the other states taxing estates at 16% in one major way: It’s not a progressive rate. All estates valued at $2.75 million or more must fork over 16%. And there’s a lot that goes into factoring that value. Real estate, vehicles, bank accounts, retirement accounts, and life insurance policies are all assets that determine how much a Vermont estate is worth.

Next: The one state that takes the most from your estate.

1. Washington

Seattle downtown and Space Needle

Washington state has the highest estate tax rate in the nation. | aiisha5/iStock/Getty Images

  • Estate tax rate: 20%

This is it, the state that taxes your estate the most (depending on how much it’s worth). Anything less than $1 million? You’re in the clear; the state won’t take anything. But the tax rate quickly jumps up to 14% for anything between $1 million and $2 million, and it increases all the way to 20% for anything worth $9 million or more. And that’s after you have to pony up $1.49 million. For the sake of argument, let’s look at Amazon CEO Jeff Bezos. He is worth an estimated $98 billion. If he didn’t do anything to shelter his estate from taxation, the tax bill would equate to roughly $19,601,419,000.

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Read more: The Secret Way Amazon Is Making a Ton of Money

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