SimplyTrust Knowledge Base

A: An inheritance tax differs from an estate tax in that it's paid by the person receiving inherited assets rather than by the deceased person's estate. While some states like Pennsylvania and New Jersey impose taxes on beneficiaries, the state has chosen not to implement this type of taxation.Georgia's decision to forgo taxation aligns with the approach taken by most states, which recognize that taxing inherited assets can create financial hardship for grieving families and may discourage wealth accumulation within state borders.The absence of inheritance tax in Georgia provides several practical advantages. Consider a scenario where a Georgia resident inherits their parent's home valued at $300,000. In a state with inheritance tax, the beneficiary might owe thousands of dollars in taxes simply for receiving this asset. In Georgia, the beneficiary receives the full value without state-level inheritance tax obligations.Similarly, when adult children inherit investment accounts, family businesses, or other valuable assets, they can focus on managing these inherited assets rather than immediately liquidating portions to pay state inheritance taxes.

A: Today, Georgia residents only need to consider federal tax obligations. The federal estate tax applies to estates valued above $13.61 million per person in 2024, with rates reaching up to 40%. For most families, this means estate tax concerns focus solely on federal requirements rather than state-level obligations.Like many states, Georgia previously had its own estate tax system that worked alongside federal requirements. The state eventually eliminated this tax as part of broader tax policy changes. This change reflected a regional trend among southeastern states moving away from estate taxation.

A: Taxes are not the deciding factor. People comparing revocable trusts in Florida versus Nevada often focus on taxes. Neither state has a state income tax. Neither state imposes an estate tax or inheritance tax. For revocable trusts, tax treatment is largely federal and similar in both states.That means the choice is rarely about tax savings alone.Real-World Choice Points:Imagine a retired couple living full-time in Naples with Florida real estate. A Florida revocable trust aligns naturally with their assets and daily life. Local property rules, homestead protections, and courts all point toward Florida.Now imagine a technology founder who owns Nevada-based businesses and plans to expand asset protection later. Starting with a Nevada trust may better match future goals, even if the trust remains revocable at first.

A: The turning point for Florida came in 2005. Congress phased out that federal credit and fully removed it for 2005. The state’s estate tax was tied to the credit. So, for passings on or after January 1, 2005, the state tax dropped to zero.That timing mattered. Two similar estates could land differently. A passing on December 31, 2004 might trigger a Florida return and payment. A passing on January 1, 2005 generally would not.