NEWS YOU CAN USE: Estate Taxes Alive and Well in 16 States

Physician's Money Digest, November 2005, Volume 12, Issue 15

Washington Post

Ever wonder why Florida is such an attractive retirement location? It could have more to do with the state's constitutional prohibition against estate taxes than the sand and sun. Since the federal government signed legislation to phase out the federal estate tax by 2010, 16 states have chosen to levy separate death taxes, picking up revenue that is no longer tied to the federal government. Therefore, inheritors in these states have to pay both a state and a federal estate tax, all for the honor of living and dying in a particular state. Residents in the remaining 34 states only have to pay one federal death tax for estates of more than $1.5 million. According to the , Congress was supposed to vote on a permanent repeal of state death taxes this past September, but this vote has been delayed due to the more pressing needs resulting from Hurricane Katrina. If not repealed, the federal government may enact an estate tax of 15% in 2011. It seems that proximity to the golf course is not the only factor to consider when choosing a retirement location; the following are states you may want to think twice about before choosing them for retirement: