Minnesota Estate Tax Exemption Update
Both the State and Federal government establish an exemption amount for Estate Taxes. Estates that exceed the exemption amount are taxed on amount they exceed the exemption.
Recently the Minnesota Legislature in its budget bill has increased the Minnesota Estate tax exemption. This bill increases the exemption from its current $1.8 million level to $2.1 million for 2017 (retroactive to Jan. 1), $2.4 million in 2018, $2.7 million in 2019, and $3 million for 2020 and later. Estates which do not exceed these amounts will pass without any estate tax obligations.
These exemptions amounts are individual exemptions. In Minnesota a married couple, with proper estate planning, can each utilize their own exemption, effectively doubling the amount that can pass tax-free. Under the Federal laws, the surviving spouse can utilize the unused portion of a deceased spouse’s exemption without any special planning. The State Legislature did not adopt similar provisions typically referred to as portability.