SimplyTrust Knowledge Base

A: As of 2025, New York continues to levy its own estate tax with an exclusion (exemption) indexed annually for inflation. Here are the basics: Exclusion amount: $7.16 million per person (inflation-adjusted annually). If your taxable estate is below that number, there’s no New York estate tax. Rates: Graduated rates from 3.06% up to 16%. No portability: Unlike the federal system, New York does not let a surviving spouse “port” any unused exclusion. Many couples use credit-shelter or similar trusts to preserve both spouses’ exclusions. Gift add-back: New York has no gift tax, but taxable gifts made within three years of death are generally pulled back into the estate (with certain timing carve-outs). This can push an estate over the line—see “the cliff” below. The infamous “cliff” (and why it bites): New York’s twist is the estate tax “cliff.” If your taxable estate exceeds the exclusion by even a little, the benefit phases out quickly—and once you’re over 105% of the exclusion, the entire estate becomes taxable (not just the dollars above the line). Practically, a modest “extra” can trigger a disproportionately large tax bill. For 2025, 105% of $7.16 million is $7.518 million; cross that threshold and you’ve fallen off the cliff.

A: Even the best trustee can't promise forever. People move, retire, get busy, or prefer gardening to spreadsheets. A successor trustee steps in if the original trustee can't serve, won't serve, or should stop serving. That keeps your plan humming without court delays or family debates. Think of it like appointing a designated driver for your trust. If the first driver hands over the keys, the night continues safely.

A: For revocable trusts, the day-to-day experience is broadly similar:1) Probate avoidance works in both places—what matters most is properly funding the trust (retitling your home, accounts, and other assets).2) Incapacity planning is the same core idea: your named successor steps in seamlessly.3) Privacy and speed: both beat a public probate file.If you live in DC, using a standard DC-governed revocable trust will accomplish these goals effectively.

A: No. DC used to impose an inheritance tax (a tax on the recipient of an inheritance). That system is now largely a historical footnote. The District requires inheritance-tax filings only for very old estates—those involving deaths on or before March 31, 1987. For anyone who passed after April 1, 1987, the modern inheritance tax no longer applies. However, the District’s estate tax is very much current, with a 2025 exclusion of $4,873,200 and progressive brackets above that. A quick check of your asset picture—and where those assets are located—goes a long way toward avoiding surprises for your heirs.

A: The District of Columbia estate tax targets larger estates with a 2025 exclusion of $4,873,200 and progressive rates up to 16%. Many states moved away from estate taxes after federal changes, but DC chose to keep one—for three practical reasons:Revenue stability. When the federal credit disappeared, jurisdictions that relied on it faced a revenue choice. Keeping a stand-alone estate tax preserved a modest but meaningful revenue stream. Progressivity. Estate taxes apply only to larger estates, aligning with DC's broader progressive tax posture. (An Urban-Brookings analysis highlights how the federal credit’s end pushed states to make explicit policy choices.) Coordination with federal rules, on DC's terms. DC indexes its exclusion for inflation but at a level far below the federal exemption, so local policy—not just federal changes—drives who pays.

A: Nevada is more trust-friendly. The state is famous for being trust-friendly (decanting statutes, directed trusts, domestic asset protection trusts). For a revocable trust, the big levers that will actually change your outcome are:1. Your state of residence (taxes, property regime).2. Where your trust is administered after it becomes irrevocable.3. Whether you’ve properly funded the trust and coordinated beneficiary designations.4. Whether your plan accounts for Connecticut’s estate tax if you remain domiciled there.For revocable trusts in Connecticut versus Nevada, the documents look similar—but the results can differ because of taxes and property rules. Your domicile, how you title assets, and where the trust will be administered after it becomes irrevocable are what ultimately move the needle.

A: No, but the state used to. Before 2005, Connecticut used a succession (inheritance) tax, which taxed heirs on what they received. That tax was phased out over time and then eliminated for deaths on or after Jan. 1, 2005. At the same time, Connecticut updated its separate transfer-tax framework, ultimately unifying the estate tax and gift tax so lifetime taxable gifts count toward what can be transferred tax-free at death. In short, the state shifted away from taxing beneficiaries to taxing the estate itself (with credit for prior taxable gifts).

A: Policy research within the state points to two big reasons: revenue stability and progressivity. Keeping an estate tax can diversify revenue and target collections to the largest estates, which has been cited as a way to address inequality while protecting most families from any state-level transfer tax at all. Connecticut analysts have explicitly framed the estate tax as a tool that reaches only the very top of the wealth distribution. For decedents dying in 2025, Connecticut’s exemption equals the federal amount: $13.99 million per person. Only the portion above that is subject to Connecticut tax. The state imposes a flat 12% rate on amounts over the exemption, and there’s a $15 million cap on total Connecticut estate (and gift) tax for a decedent.

A: A revocable living trust works similarly in both states: you keep control, you can amend or revoke anytime, and there’s no asset protection from your own creditors while the trust is revocable. The real distinctions come from state income tax, community property options, and some administrative “nice to haves” in Nevada that matter more for complex or multistate estates.For most families, revocable trusts in Arizona versus Nevada perform the same core job: avoid probate and keep things organized. Your residence (and your trustee’s) drives taxes and administration more than the state name on page one.

A: Arizona’s estate tax disappeared when the old federal pick-up system did—and the state chose not to bring it back. Today, there’s no state estate or inheritance tax, so your planning is really federal planning plus ordinary income-tax awareness for inherited income streams. That combination keeps things relatively straightforward.

A: Arizona eliminated its inheritance tax in 1937 and later repealed its linked estate-tax provisions in 2006 after the federal credit disappeared. Today, there’s no inheritance tax in Arizona and no separate state estate tax—one big reason planning here is relatively straightforward. Focus on federal rules, Arizona income-tax treatment of inherited income, and (if relevant) the inheritance-tax rules of any non-Arizona state connected to your family.

A: Both states are excellent homes for a modern, flexible plan. Revocable trusts in Alaska and Nevada share core benefits—probate avoidance, privacy, and administrative clarity. Alaska stands out for opt-in community property options and a long track record of trust innovation. Nevada is a community-property state and also draws attention for strong confidentiality practices and a deep directed-trust ecosystem.Although both states offer robust asset protection, Nevada's shorter statute of limitations (two years compared to Alaska's four) provides more immediate security. Moreover, Nevada provides better privacy protections, not mandating the public disclosure of trusts, contrasting with Alaska's more relaxed privacy standards.Choosing between these states may depend primarily on the specific needs of the trust creator regarding privacy, control, and flexibility.

A: Both Alaska and Nevada offer strong asset protection laws. However, Nevada is often preferred for its robust privacy provisions and shorter statutes of limitation.

A: The choice between Alaska and Nevada largely depends on individual needs for privacy, control, and jurisdictional preferences, with Nevada often being chosen for stricter privacy and flexible trust management laws.