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10 States With the Scariest Death Taxes, 2016


Federal estate taxes are no longer a problem for all but the extremely wealthy. In 2016, as much as $5.45 million in assets is exempt from federal estate taxes—double that for a married couple; in 2017, it will rise to $5.49 million.

However, state estate taxes, which kick in for estates valued at only $1.5 million or less in several states, could take a big bite out of your legacy. Your home and retirement accounts will be counted when your estate is valued for tax purposes, and proceeds from your life insurance could be counted, too, depending on how the policy is owned and who gets the money.

Fourteen states and the District of Columbia impose an estate tax, and six states impose an inheritance tax, which can force certain heirs to give up a portion of their inheritance. The good news is that a growing number of states are increasing their estate-tax exemptions in an effort to dissuade well-off retirees from moving to more tax-friendly jurisdictions.

Tennessee’s inheritance tax was eliminated in 2016, so it's no longer on our list. New Jersey will increase its estate tax exemption to $2 million in 2017; no longer the worst state for your estate, it now ranks fifth on our list here. The new least-friendly place to die? Take a look.

SEE ALSO: RETIREE TAX MAP: State-by-State Guide to Taxes on Retirees

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