Estate taxes are charges that occur when a person dies. They typically apply to the value of the estate the person leaves behind prior to transferring any assets to heirs.
Louisiana has an estate transfer tax, but it does not impose an estate or inheritance tax. The federal government may impose an estate tax.
Estate transfer tax
Louisiana’s estate transfer tax applies if the estate will have to pay federal estate taxes or the value is over $60,000. The amount paid is the same as the credit given on federal taxes for a state death tax.
Other taxes
Louisiana does not have an inheritance tax, which requires an heir to pay taxes on the assets he or she receives. However, it is possible to owe this tax if there is another state involved. For example, if you live in Louisiana, but the person who died lived in another state, you may have to pay inheritance taxes in that other state because it is where the estate existed.
The federal estate tax has a very high threshold. For 2023, the value of an estate must be almost $13 million to be subject to this taxation. Most people will not have to pay this tax because their estates do not reach the high value required for payment.
It is important to understand the potential taxation that may occur on an estate after a person dies. Failing to pay the proper taxes when due could result in more fees and increased money owed to the state or federal government. You should check into estate taxes before you die so that you can allow your heirs to know what they may need to pay when you die before they can receive their inheritance.