Inheritance taxes are paid by certain heirs and beneficiaries when they receive an inheritance. The tax rate imposed on an inheritance depends on the recipient’s relationship with the deceased. In all states, the surviving spouse does not have to pay the inheritance tax. Depending on the state, sometimes children are taxed at a low rate. As the beneficiary becomes a more distant relative or non- relation, the highest rates start to kick in. If you live in a state with an inheritance tax and plan to leave substantial amounts or valuable property to a non-spouse, we suggest that you consult with a qualified estate planning attorney who can review your estate plan and advise you as to whether lifetime tax planning could reduce the inheritance tax imposed on your heirs and beneficiaries.

States with an inheritance tax, and highest tax rate:

Iowa - 15%

Kentucky - 16%

Maryland - 10%

Nebraska - 18%

New Jersey - 16%

Pennsylvania - 15%

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