Experienced Legal Counsel From A Local Law Firm

Does Michigan have an inheritance tax?

On Behalf of | Apr 15, 2020 | estate planning and probate | 0 comments

Michigan does have an inheritance tax. However, this should probably not concern you while making a new estate plan or considering the value of the estate of a recently lost loved one. It only applies to older cases. 

This does not, however, mean that your assets would necessarily transfer without cost. There are many other factors that could be relevant to your situation. 

State tax only applies to older cases 

As mentioned on the official state website, you would probably not have to worry about Michigan’s inheritance tax. This is because it only applies to assets of people who passed away on or before September 30, 1993. 

There are some cases, such as those with newly discovered assets, in which you may have to address the tax. As mentioned above, it would not represent an additional cost to disbursement for your own, forward-looking estate plan. 

Federal tax applies to larger estates 

Federal tax could be an issue. You would have to leave a sizable estate behind, however. 

Other taxes could apply 

While inheritance taxes could potentially be a risk your estate faces, they are far from the only costs that could diminish your assets. For example, depending on your portfolio, you would want to be aware of how the government assigns the following taxes during life and after death: 

  • Capital gains (taxed as regular income in Michigan) 
  • Gift tax 

Your estate might have other risks. Of course, it is impossible to predict every eventuality — that is one of the reasons that estate plans require regular maintenance. A good, overall strategy would include plans to maintain your way of life, have consistent access to healthcare and ensure your loved ones carry out your wishes. 

Categories

Archives