Slide Show | Originally Published October 2015

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10 States With the Scariest Death Taxes

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Federal estate taxes are no longer a problem for all but the extremely wealthy. In 2016, as much as $5.45 million in assets will be exempt from federal estate taxes—double that for a married couple.

However, state estate taxes, which kick in for estates valued at only $1 million or less in several states, could take a big bite out of your legacy. Your home and retirement accounts will be counted when your estate is valued for tax purposes, and proceeds from your life insurance could be counted, too, depending on how the policy is owned and who gets the money.

Sixteen states and the District of Columbia impose an estate tax, and seven states impose an inheritance tax, which can force certain heirs to give up a portion of their inheritance. The good news is that a growing number of states are increasing their estate-tax exemptions in an effort to dissuade well-off retirees from moving to more tax-friendly jurisdictions. In 2015, four states increased their estate-tax exemption, and more relief is scheduled over the next five years.

Tennessee’s inheritance tax (which is actually an estate tax because it’s applied to the value of estates) will be eliminated in 2016. The state didn’t quite make our list of the 10 States With the Scariest Death Taxes this year, and it will fall out of contention entirely next year. Maine drops off our list (it was number eight in 2014) because its estate-tax exemption will jump from $2 million to $5.43 million—the same as the federal threshold—on January 1, 2016.

Here's a look at the states that are the least friendly places to die.

10 States With the Scariest Death Taxes

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