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New Year, No Taxes! (Well, Tennessee Estate Taxes, That Is)
It may seem rare that your taxes decrease, but as of January 1, 2016, the State of Tennessee will no longer tax your Estate. This has been part of a plan that the State enacted in 2012, gradually increasing the amount of a tax-exempt estate until this year, when the tax was repealed completely.
Practically, this has several impacts.
1. First, this may simplify your estate planning.Because a large part of estate planning can be minimizing taxes, there is no longer a need to strategize in order to minimize Tennessee estate taxes.
2. Second, in most cases, there will be one less step involved in probating an estate or selling the real estate of a decedent.Typically, a clearance letter is required from the Tennessee Department of Revenue stating that the estate did not owe any inheritance tax.We will no longer need to receive that release.This is especially important when selling the real estate of a decedent.Obtaining that release has often been the delay of sales.
3. Third, it should be noted that there is still a Federal estate tax for estates over $5,450,000.00 so planning will be necessary to minimize or eliminate tax implications if your estate may exceed this amount.
It is important to realize that this only applies to decedents who passed away on or after January 1, 2016. This is because an estate is subject to the estate tax laws in place during the year in which the decedent passed away.
This is one tax change that we are glad to see.
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