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Indiana Inheritance Tax Bill Signed

Yesterday Governor Mitch Daniels signed the bill into law that will completely eliminate the Indiana inheritance tax after 2021. Until then, the tax will gradually phase out by applying an increasing credit against any liability.

A higher $250,000 exemption (formerly $100,000) is now available for each Class A beneficiary retroactive to January 1, 2012. Class A beneficiaries typically consist of lineal ancestors and lineal descendants such as a child, grandchild, parent, etc. The new law additionally defines a child’s (or stepchild’s) spouse as a Class A beneficiary to receive this increased exemption. This is a substantial benefit since a daughter-in-law or son-in-law previously only received a Class B beneficiary exemption of $500 and was then subject to more progressive tax rates.

As an example, an individual with two married children can potentially bequeath a $1 million estate free of Indiana inheritance tax ($250,000 to each child and $250,000 to each child’s spouse). Previously, this same estate would have paid approximately $51,000 in Indiana inheritance tax.

This is a significant development in the wealth and estate planning arena, and our wealth planning team continues to monitor details of such activities to evaluate the impact on our clients’ personal wealth plans.

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The information in this material is only as current as the date indicated, and may be superseded by subsequent market events or for other reasons. While all information prepared in this document is believed to be accurate, any statements of opinion constitute only current opinions of Payne Wealth Partners, Inc., which are subject to change and which Payne Wealth Partners, Inc. does not undertake to update. Accordingly, you should not put undue reliance on these statements. The information does not attempt to examine all the facts and circumstances that may be relevant to an individual’s financial needs. Payne Wealth Partners, Inc. is not soliciting any action based on these statements.

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Payne Wealth Partners, Inc.
Keystone Financial Consulting
601 N Cross Pointe Blvd
Evansville, IN 47715
Phone: 812-477-6221
Toll Free: 888-477-6221
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