Estate tax rates (federal & state) disclosures

Luminary updates federal and state level tax changes shortly after their official confirmation.

Luminary automatically estimates federal and state level estate taxes in the Estate Waterfall and Gift Analysis tool. State residence is set for each client on the “People” screen. Please note Luminary currently does not account for inheritance taxes, however this feature is on our product roadmap.

This document discloses the tax rates and brackets used in the estate tax calculations in Luminary. Note that all calculations in Luminary are for illustrative purposes only, are not an indication of actual tax amounts, and do not constitute tax advice.

Federal only

Assumes that assets transferred to non-charitable beneficiaries, in excess of the client’s remaining lifetime exemption will be taxed at a federal estate tax rate of 40%. Assumes assets held outside of the client’s estate are not subject to estate tax.

Connecticut

Assumes that assets in the estate, for Connecticut estate tax purposes, in excess of the current exemption of *$15 million per person, are subject to a Connecticut estate tax of 12% (*based on Connecticut statute tying the exemption to the federal basic exclusion amount; pending DRS publication). Further assumes that all assets in the Federally taxable estate in excess of the current exemption of $15 million per person are subject to a Federal estate tax rate of 40%. Transfers to recipients under the marital or charitable exclusions are not subject to state or Federal estate tax, and state estate taxes paid are deducted from the Federal taxable estate.

Connecticut also imposes a state-level gift tax that is unified with the estate tax and uses the same $15 million lifetime exemption and 12% tax rate. Connecticut taxable lifetime gifts made on or after January 1, 2005, in excess of the Federal annual gift tax exclusion amount, reduce the available Connecticut estate tax exemption. Any Connecticut gift tax paid on or after January 1, 2005, is allowed as a credit against the Connecticut estate tax. The amount of Connecticut estate tax due is currently capped at $15 million per person.

Connecticut has a flat tax so there are no brackets.

Hawaii

Assumes that assets in the estate, for Hawaii estate tax purposes, in excess of the current exemption of $5.49 million per person, are subject to a progressive Hawaii estate tax ranging from 10% to 20%. Unused Hawaii state exemption is assumed to be portable.Further assumes all assets in the Federally taxable estate in excess of the current exemption of $15 million per person are subject to a Federal estate tax rate of 40%. Transfers to recipients under the marital or charitable exclusions are not subject to state or Federal estate tax, and state estate taxes paid are deducted from the Federal taxable estate.

Illinois

Assumes that if assets in the estate, for Illinois estate tax purposes, are in excess of the current exemption of $4.0 million per person, then the entire taxable estate is subject to a progressive Illinois estate tax ranging from 0.8% to 16%. Further assumes that all assets in the Federally taxable estate in excess of the current exemption of $15 million per person are subject to a Federal estate tax rate of 40%. Transfers to recipients under the marital or charitable exclusions are not subject to state or Federal estate tax, and state estate taxes paid are deducted from the Federal taxable estate.

Maine

Assumes that assets in the estate, for Maine estate tax purposes, in excess of the current exemption of $7.0 million per person, are subject to a progressive Maine estate tax ranging from 8% to 12%. The state exemption is modeled to adjust by the entered exemption growth rate. Further assumes that all assets in the Federally taxable estate in excess of the current exemption of $15 million per person are subject to a Federal estate tax rate of 40%. Transfers to recipients under the marital or charitable exclusions are not subject to state or Federal estate tax, and state estate taxes paid are deducted from the Federal taxable estate.

Maryland

Assumes that assets in the estate, for Maryland estate tax purposes, in excess of the current exemption of $5.0 million per person, are subject to a progressive Maryland estate tax ranging from 0.8% to 16%. Unused Maryland state exemption is assumed to be portable. Further assumes that all assets in the Federally taxable estate in excess of the current exemption of $15 million per person are subject to a Federal estate tax rate of 40%. Transfers to recipients under the marital or charitable exclusions are not subject to state or Federal estate tax, and state estate taxes paid are deducted from the Federal taxable estate.

Massachusetts

Assumes that assets in the estate, for Massachusetts estate tax purposes, in excess of the current exemption of $2.0 million per person, then the entire taxable estate is subject to a progressive Massachusetts estate tax ranging from 0.8% to 16%. Further assumes that all assets in the Federally taxable estate in excess of the current exemption of $15 million per person are subject to a Federal estate tax rate of 40%. Transfers to recipients under the marital or charitable exclusions are not subject to state or Federal estate tax, and state estate taxes paid are deducted from the Federal taxable estate.

Minnesota

Assumes that assets in the estate, for Minnesota estate tax purposes, in excess of the current exemption of $3.0 million per person, are subject to a progressive Minnesota estate tax ranging from 13% to 16%. Further assumes that all assets in the Federally taxable estate in excess of the current exemption of $15 million per person are subject to a Federal estate tax rate of 40%. Transfers to recipients under the marital or charitable exclusions are not subject to state or Federal estate tax, and state estate taxes paid are deducted from the Federal taxable estate.

New York

Assumes that if assets in the estate, for New York estate tax purposes, exceed $7,717,500 (or 105% of the current New York estate tax exemption of $7.35 million per person), then the entire taxable estate is subject to a progressive New York estate tax ranging from 3.06% to 16%. The state exemption is modeled to adjust by the entered exemption growth rate. Further assumes that all assets in the Federally taxable estate in excess of the current exemption of $15 million per person are subject to a Federal estate tax rate of 40%. Transfers to recipients under the marital or charitable exclusions are not subject to state or Federal estate tax, and state estate taxes paid are deducted from the Federal taxable estate.

Oregon

Assumes that assets in the estate, for Oregon estate tax purposes, in excess of the current exemption of $1.0 million per person, are subject to a progressive Oregon estate tax ranging from 10% to 16%. Further assumes that all assets in the Federally taxable estate in excess of the current exemption of $15 million per person are subject to a Federal estate tax rate of 40%. Transfers to recipients under the marital or charitable exclusions are not subject to state or Federal estate tax, and state estate taxes paid are deducted from the Federal taxable estate.

Rhode Island

Assumes that assets in the estate, for Rhode Island estate tax purposes, in excess of the current exemption of $1,838,056 per person, are subject to a progressive Rhode Island estate tax ranging from 0.8% to 16%. The state exemption is modeled to adjust by the entered exemption growth rate. Further assumes that all assets in the Federally taxable estate in excess of the current exemption of $15 million per person are subject to a Federal estate tax rate of 40%. Transfers to recipients under the marital or charitable exclusions are not subject to state or Federal estate tax, and state estate taxes paid are deducted from the Federal taxable estate.

Vermont

Assumes that assets in the estate, for Vermont estate tax purposes, in excess of the current exemption of $5.0 million per person, are subject to a Vermont estate tax of 16%. Further assumes that all assets in the Federally taxable estate in excess of the current exemption of $15 million per person are subject to a Federal estate tax rate of 40%. Transfers to recipients under the marital or charitable exclusions are not subject to state or Federal estate tax, and state estate taxes paid are deducted from the Federal taxable estate.

Vermont has a flat tax so there are no brackets.

Washington

Assumes that assets in the estate, for Washington estate tax purposes, in excess of the current exemption of $3,000,000 per person, are subject to a progressive Washington estate tax ranging from 10% to 20%. Further assumes that all assets in the Federally taxable estate in excess of the current exemption of $15 million per person are subject to a Federal estate tax rate of 40%. Transfers to recipients under the marital or charitable exclusions are not subject to state or Federal estate tax, and state estate taxes paid are deducted from the Federal taxable estate.

Washington, D.C.

Assumes that assets in the estate, for D.C. estate tax purposes, in excess of the current exemption of $4,988,400 million per person, are subject to a progressive D.C. estate tax ranging from 11.2% to 16%. The exemption is modeled to adjust by the entered exemption growth rate. Further assumes that all assets in the Federally taxable estate in excess of the current exemption of $15 million per person are subject to a Federal estate tax rate of 40%. Transfers to recipients under the marital or charitable exclusions are not subject to state or Federal estate tax, and state estate taxes paid are deducted from the Federal taxable estate.

Bracket ranges are illustrative and may represent 2025 ranges while official 2026 publication is still pending; rates apply progressively to taxable estate value above the exemption.