In late May Governor Dayton signed the Omnibus Tax Bill which included changes to the Minnesota estate tax exemption for future tax years. Before the bill, the MN estate tax exemption had increased by $200,000 every year since 2013 and was up to $1,600,000 for 2016. The new changes to the exemption amount will increase in proceeding tax years as follows:
- 2017 – Exemption is bumped up to $2,100,000 from $1,800,000
- 2018 – Exemption is $2,400,000
- 2019 – Exemption is $2,700,000
- 2020+ – Exemption is $3,000,000
These changes increase the overall estate tax exemption from $2 million (currently being phased in and would be completely phased in next year) to $3 million over a four year period.
Some advance planning can help families minimize or eliminate the impact of estate taxes on their estates. This can be especially important for Minnesota purposes, which has not adopted portability – a method by which a deceased spouse can pass his or her unused exemption amount to the surviving spouse.
If you have any questions or would like additional information, please contact your trusted advisors at Lurie, LLP.