Seeking La. inheritance/estate clarification

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  • #3974

    birdlover
    Participant

    I’m in my “golden years” and am trying to understand
    Louisiana’s inheritance/estate laws.

    Since I have lived past year 2004, my offspring should
    not have to pay Louisiana inheritance taxes. But it
    is not clear to me about La. estate taxes. The estate
    is over $60K. Will my offspring be required to pay
    La. estate taxes on the inheritance? She is the sole
    final beneficiary of a revocable trust, which owns
    all probatable assets.

    Will she have to file a La. estate tax return?

  • #3975

    Lex
    Keymaster

    Hi.

    An estate tax is based on the value of the estate and is owed by the estate.

    An inheritance tax is based on the amount inherited and each heir owes taxes on their portion.

    Louisiana never had an estate tax and the inheritance tax was phased out and is gone.

  • #3981

    birdlover
    Participant

    Lex, thank you for your answer.

    If Louisiana never had an estate tax, What is the
    “estate transfer tax” referenced in http://revenue.louisiana.gov/InheritanceAndEstateTransferTaxes ?

  • #3982

    Lex
    Keymaster

    If a Louisiana estate was large enough to owe the federal estate tax, then Louisiana wanted a piece of that action too. So, in addition to any inheritance tax there could also be additional taxes due the State depending on the required filing of a federal estate tax return.

    All of this is now history.

  • #4006

    Lex
    Keymaster

    Let me just add, because I find it interesting, that many states had or even still have an estate transfer tax.

    Basically, it is a way to get some tax money for a state without costing the estate or heir anything. In the simplest terms, the state required that you pay them the maximum amount that was deductible from the federal estate tax return. So, if the estate transfer tax was $5,000 and you could deduct that amount from the federal estate tax return, then the feds are out $5,000, the state gets $5,000, and you haven’t paid any more in total taxes.

    Make sense?

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