The Federal estate tax exemption sits at $3.5 million. As such, many people fail to include tax planning in their estate plan. However, many states impose their own estate tax. Self-planners do not consider the local tax and assume any state rule would mirror the federal rule. This oversight leads to many heirs being shocked when a tax bill arrives for a smaller estate.
For example, Ohio imposes a tax on any estate valued at over $338,333. In other words, if a decedent - the person who dies - was close to paying off a house and carried a life insurance policy, his/her heirs are likely paying estate tax.
Kiplinger details this estate planning wrinkle here.
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