Discussion is ongoing among Minnesota legislators about reducing the amount of estate taxes paid by certain individuals following their death. Certain members of the Minnesota House would like to more than double the amount of money required in the estate before subjecting estate assets to taxation.
Currently, wealth of $1.4 million triggers the Minnesota estate tax. By 2018, this amount would increase to $2 million. However, under the House bill proposes raising the threshold to $2 million this year. Also, after a series of additional annual adjustments, this tax would only affect estates of $5 million or more by 2018. The future increases of this threshold would be dependent on inflation levels. Finally, in 2018 under this proposal there would be a flat rate of 16 percent taking effect.
The Minnesota House Tax Chair expressed concerns about how expensive a place Minnesota is regarding estate taxes. He would like the estate tax exemption to match that of the federal tax code. Also, he had worries that residents would move to other states for purposes of protecting assets. He noted such a bill would help small business owners and farmers.
There’s no guarantee the tax bill will pass as it has generated controversy. One state senator noted estate planning already allows for passing on much of one’s estate to the next generation.
As we’ve noted many times, there are a number of ways to protect an inheritance through the use of various estate planning tools. However, such planning is not a simple matter and anyone curious about their options would benefit from speaking to experienced estate planning attorneys.
Source: MPR News, “Minnesota lawmakers poised to limit reach of estate tax,” Tim Pugmire, April 24, 2015