On March 20, 2012, Governor Mitch Daniels signed House Enrolled Act 293 which effectively eliminates the Indiana inheritance tax, sometimes called the “death tax,” by 2021. Immediately, the law will increase the current exemption of $100,000 for Class A beneficiaries to $250,000. Class A beneficiaries include children, grandchildren, and stepchildren of the deceased. The increased exemption amount is available for the estates of individuals who die after December 31, 2011 and those Class A beneficiaries will be able to enjoy the first $250,000 of property interests transferred free of inheritance tax.
For the phase out portion of the new law, all beneficiaries of individuals who die in 2013 will be eligible for a ten percent credit allowed against the inheritance tax imposed. The credit increases by ten percent each subsequent year, with a ninety percent credit available for beneficiaries for individuals who die in 2021. The new law provides there will be no Indiana inheritance tax on the estate of individuals who die after December 31, 2021.
If you have any questions about how this new law may affect your own estate or the estate of your loved ones, please contact us.