The estate tax, often called the “death tax,” is a tax on the assets you transfer to your heirs after you die. It’s based on the value of everything you own when you pass away before those assets are distributed.
The good news for Georgians is that the state of Georgia no longer has its own estate tax. The Georgia death tax was eliminated for anyone who died on or after July 1, 2014.
Even though Georgia doesn’t have an estate tax, it’s still important to understand the federal estate tax laws. Depending on the size of your estate, federal taxes could still apply.
This article explains what Georgia residents need to know about estate taxes and how to plan accordingly.
Estate tax vs. inheritance tax
It’s easy to confuse estate and inheritance taxes, but they’re different.
An estate tax is levied on the estate itself before it’s distributed to any heirs. The estate pays the tax out of its assets.
An inheritance tax is levied on the beneficiaries who inherit the assets. It’s imposed on the individuals who receive assets from an estate, not the estate itself. The heir is responsible for paying it.
Georgia has neither an estate tax nor an inheritance tax. It’s one of 38 states with no estate tax.
However, if you live in Georgia and inherit property in a state with an inheritance tax, you may have to pay that state’s tax.
Federal Estate Tax: Thresholds, Rates, and the “Sunset” Provision
Even though Georgia doesn’t have an estate tax, your estate may still be subject to the federal estate tax.
Current Federal Estate Tax Exemption
For 2025, the federal estate tax exemption is \$13.99 million for individuals and \$27.98 million for married couples. That means if your estate is valued below those amounts, it won’t be subject to the federal estate tax.
Federal Estate Tax Rates
Estates that exceed the exemption threshold are subject to federal estate taxes, which range from 18% to 40%.
As an example, imagine you aren’t married and your estate is worth \$15.93 million. In that case, your estate would owe \$721,800 in estate tax (in 2025).
The 2026 “Sunset” Provision
The current federal estate tax rules are set to expire or “sunset” at the end of 2025. Unless Congress acts, the exemption is scheduled to decrease to around \$7 million for individuals and \$14 million for married couples in 2026.
Of course, this could all change depending on what Congress decides to do.
What’s Included in Your Estate?
Your “estate” is everything you own at the time of your death. That includes:
- Real estate
- Personal belongings (jewelry, furniture, cars, etc.)
- Checking, savings, and investment accounts
- Business interests
- Cash
- Retirement accounts
- Life insurance policies
To figure out the value of your estate, you’ll need to determine the fair market value of all these assets. You can then subtract certain deductions, such as:
- Unpaid debts
- Mortgage balances
- Estate administration costs
Keep in mind that large gifts you gave during your lifetime may also affect the value of your estate for tax purposes.
Strategies for Minimizing Federal Estate Tax Liability
Even though Georgia doesn’t have an estate tax, most people are still subject to the federal estate tax. Here are some ways to reduce what you might owe.
Gifting Strategies
One of the easiest ways to reduce the value of your estate is to give some of it away while you’re still alive. The federal government allows you to give a certain amount each year, tax-free. For 2024, the annual gift tax exclusion is \$18,000 per recipient. For 2025, the federal gift tax exclusion is \$19,000 per recipient.
You can also make larger gifts during your lifetime, but these may be subject to gift taxes.
Trust Utilization
Trusts are a popular way to manage assets and minimize estate taxes.
- Irrevocable Life Insurance Trusts (ILITs): An ILIT can help manage life insurance payouts and reduce the amount of estate tax owed.
- A/B Trusts or Credit Shelter Trusts: These trusts help maximize the use of estate tax exemptions.
- Family Limited Partnerships: These are another possible strategy.
Charitable Donations
Donating to a charity can reduce the size of your taxable estate.
Planned giving strategies are a way to support charities while also reducing estate tax.
Marital Deduction
Assets you leave to your surviving spouse are generally exempt from estate tax because of the marital deduction.
Inheriting Property in Georgia: Key Considerations
Inheriting property can be complicated. Here are some things to keep in mind:
- Talk to co-heirs: If you’re inheriting property with other people, make sure you’re all on the same page. Good communication is essential.
- Know what you owe: Check for any outstanding debts, mortgages, or other financial obligations tied to the property. These become your responsibility.
- Factor in ongoing costs: Remember that you’ll need to pay property taxes, insurance, and for general upkeep. Can you afford it?
- Understand “step-up in basis”: This is a tax benefit. When you inherit property, its value is “stepped up” to the current market value. This can save you money on capital gains taxes if you decide to sell.
A brief history of Georgia’s estate tax
Before 2005, Georgia’s estate tax was linked to federal estate tax laws.
Between 2005 and 2014, Georgia transitioned away from that system, making changes to the state’s death tax credit.
As of July 1, 2014, Georgia completely repealed its estate tax. This means that for anyone who died on or after that date, their estate is not subject to Georgia estate tax.
This history mainly matters for understanding past estate settlements and any legal cases that might still refer to the old rules.
Common Questions About Estate Tax in Georgia
Here are some of the most common questions people have about estate tax in Georgia.
Is every estate in Georgia subject to tax?
No. Georgia doesn’t have its own estate tax. The federal estate tax only applies to estates above a certain threshold.
What specific federal estate tax rules apply to Georgia residents?
The federal estate tax rules are the same no matter which state you live in. However, your state of residence can sometimes affect how your assets are valued and taxed.
Are there upcoming changes that might affect estate planning in Georgia?
Yes, possibly. The federal estate tax exemption may be reduced in 2026, so it’s important to keep up with any potential changes to federal tax laws.
Where do I send the return and anything else related to Georgia estate tax?
Because Georgia doesn’t have an estate tax form, you’ll file the federal form, along with a copy and payment for the Georgia tax.
Do you give proof of payment?
Yes. Georgia will issue a certificate of payment to confirm that you’ve paid your estate taxes.
Planning Your Estate in Georgia: Where to Start
If you live in Georgia, here are a few steps you can take to protect your assets for your loved ones:
- Create documents: Work with a qualified attorney to draft your will and explore your trust options.
- Track assets and debts: Keep a detailed inventory of everything you own and everything you owe.
- Get professional advice: Work with financial advisors, accountants, and attorneys who specialize in estate planning.
- Update regularly: Tax laws and personal situations change. Start planning early and update your plan often.
Putting It All Together
Georgia doesn’t have its own estate tax, but your estate could still be subject to federal estate taxes. That’s why estate planning is such an important step in managing your tax liability and protecting your assets for future generations.
If you live in Georgia, you can create a plan for your estate by working with a qualified financial professional. Starting the estate planning process early can give you peace of mind now and financial security for your loved ones later.
Keep in mind that tax laws and your family’s needs can change over time, so it’s important to adapt your estate plan to those changes as they arise.