No. For decades, Delaware did impose a state estate tax tied to the federal estate tax system. Under that system, estates above a certain value had to pay a tax on the value of assets before passing them to heirs. The exemption closely tracked the federal estate tax exclusion. But lawmakers and advocates increasingly viewed the tax as a deterrent to economic activity and a potential reason for residents to relocate.
History of Estate Tax in Delaware
In 2017, the Delaware General Assembly passed legislation repealing the tax. Governor John Carney signed the bill into law, eliminating the estate tax for individuals who passed after the end of 2017. The repeal applied regardless of whether someone was a Delaware resident or a nonresident who owned property in the state.
This change means that for estates of people who pass today, there’s no tax. The state also doesn’t impose an inheritance tax or a gift tax, making Delaware one of the more tax‑friendly states in this area.
Although the state used to collect revenue from its estate tax, lawmakers decided the long‑term benefits of repeal — such as attracting retirees and preserving family wealth — outweighed the revenue loss. The federal estate tax still applies if an estate exceeds the federal exemption threshold of $15,000,000, but that’s separate from any state tax.
For families with substantial assets, estate planning tools like revocable trusts can help manage wealth transfer efficiently. Trusts avoid the probate process entirely, which in Delaware typically takes 12-18 months and costs 2-4% of the estate value in attorney fees.
Frequently Asked Questions
- Does the state have an estate tax now?
- No. Delaware does not levy a state estate tax for those who pass after December 31, 2017.
- What about inheritance tax in Delaware?
- There is no inheritance tax in Delaware either.
- Could older estates still owe tax?
- Yes. Estates of people who passed in 2017 or earlier might still need to meet Delaware estate tax obligations.
- Is there a federal estate tax?
- Yes. The federal government may tax estates that exceed the federal exemption threshold, but that’s separate from Delaware’s state taxes.
(Read More: Learn about revocable trusts in Delaware versus Nevada.)