2024 Northeast Estate Planning Guide:
Northeast Region Estate Taxes
These charts will provide a quick estate tax reference tool for planners in the northeast region of the country.
Federal Estate, Gift and Generation-Skipping Tax:
- The federal annual gift tax exclusion for 2024 has increased to $18,000. (It was $17,000 in 2023).
- In 2024, the amount of one’s estate that is exempt from federal estate, gift, and generation-skipping tax amount has increased to $13,600,000.
- The Estate, Gift and GST Tax rate remains 40%.
- The 2017 law that doubled estate and gift tax exclusions is set to sunset on 12/31/2025 at which time it is scheduled to be reduced by about one half. Thus, an exclusion of $15,000,000 in 2025 would be reduced to only $7,500,000 in 2026 (plus or minus an inflation adjustment, if any).
- A 2013 law permanently provided for “portability” of your deceased spouse’s unused federal exemption. You have up to five years from the date of death to claim the exemption. See Rev. Proc. 2022-32.
Regional Estate Tax Thresholds:
The state estate tax thresholds range from $1,774,583 (RI) to $13,610,000 (CT), and $0 for NH. All allow 100% marital and charitable deductions. For more information see the chart below.
For more states or details, credit goes to American College of Trust and Estate Counsel (ACTEC).
Real-World Example | Case Study
Three people inherited $2m each at age 50.
- Charlie from New Hampshire
- Allen from Rhode Island
- Brenda from New York
All invested wisely. They all died in 2024. By the time of their deaths, the inheritance grew to $5m each on top of the $3m they had on their own, for a total of $8m each (below the federal exemption amount).
- The tax on Charlie’s estate would be $0 because NH has no estate tax.
- The tax on Allen’s estate (RI) would be $689,830 because the taxable estate is $6,225,417 (8m – exemption ($1,774,583)).
- The tax on Brenda’s estate (NY) would be $773,200 because the taxable estate is 8 million. NY has a larger exemption ($6,940,000) BUT it has a “cliff.” Brenda’s taxable estate went over the “cliff” by more than 5%, so she is taxed on the whole amount. RI has no cliff.
Food for Thought: If each of them had inherited inside an Inheritance Trust, none of their estates would have paid estate tax on the $5m. For the explanation, see Generation-Skipping Trusts.
