Trust and Estate Counsel

Tennessee Estate Planning Law

Insight and commentary on estate planning issues impacting affluent residents of Tennessee

Tennessee Only Southern State with Death Taxes

A total of 19 states and the District of Columbia assess estate and/or inheritance taxes. The enclosed map shows that virtually all of the states in the Northeastern sector of the country impose taxes.

Tennessee is the only southern state with death taxes. Even if you consider consider Kentucky a southern state, Kentucky’s tax is insignificant because it does not apply to transfers to immediate family members.

Tennessee exempts the first $1 million from taxation. For estates in excess of $1 million, the tax equals $30,200 on the first $440,000 (above $1 million) and 9.5% on the excess. The tax does not apply to amounts distributed to spouses or charities.

Several of my clients have moved to other states, primarily Florida, in order to avoid Tennessee inheritance taxes. Each year, bills are submitted to the legislature to repeal the Tennessee inheritance tax. These bills have no chance of passage because they would decrease tax revenue.