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Understanding Delaware inheritance laws

Delaware does not levy an inheritance or estate tax. It also has the sixth lowest property tax in the entire nation. The state also declines to enforce a gift tax. However, the federal gift tax is still applied at the federal level. It takes effect if you received a gift of more than $16,000 in 2022 or $17,000 in 2023.

Do taxes still apply to your estate?

Wills & estates that were enacted before January 1, 2018, are subject to specific regulations. This is still true even though Delaware no longer enforces an official estate tax.

If you were the inheritor of an estate or part of an estate before this date, you may still be on the hook for estate taxes. Should the estate be valued at $5.49 million or more, it may still be subject to this tax.

Can taxes apply from another state?

As noted above, Delaware does not currently levy any inheritance or estate tax. However, you may inherit an estate from someone who lives in another state. If their state does levy these taxes, you will be responsible for paying them.

Is there a Federal estate tax?

Even though the state waives certain taxes, they will still apply at the Federal level. For example, the federal estate tax was applied in 2022 when an inherited estate was worth more than $12.06 million for individuals. It was also applied at $24.12 million for married couples.

The year 2023 saw the limit raised to $12.92 million for individuals. For married couples, the limit was raised to $25.84 million. These and other proposed limits and exemptions are still pending in Delaware courts.