Estate Taxes In Georgia

Beneficiaries of a decedent’s estate may be subject to pay estate taxes. The current federal estate tax rate is 40%. However, the good news for Georgia’s wealthy families is that the current federal estate tax exemptions are quite generous and Georgia has no estate taxes.

Congress and the Georgia’s state legislator have vastly revamped the estate tax laws in favor of the beneficiaries. Estate taxes are overwhelming unpopular as the beneficiaries are effectively forced to pay taxes on monies that were taxed during the lifetime of the decedent. The changes to the estate tax laws on the federal and state level have helped to simplify tax issues and reduce taxes for beneficiaries.

During the most recent legislative session in Georgia, HB 658 was passed to officially terminate the levy of estate taxes and the obligation to file estate tax returns as of July 1, 2014 once and for all. HB 658 effectively repeals O.C.G.A. § 48-12 and will codify the new law at O.C.G.A. § 48-12-1. This change became effective April 28, 2014 after the governor signed the bill.

The 2014 version of O.C.G.A. § 48-12-1 will read as follows:



(a) On and after July 1, 2014, there shall be no estate taxes levied by the state and no estate tax returns shall be required by the state.

(b) Tax, penalty, and interest liabilities and refund eligibility for prior taxable years shall not be affected by the enactment of this Code section and shall continue to be governed by the provisions of general law as it existed immediately prior to July 1, 2014.

(c) This Code section shall not abate any prosecution, punishment, penalty, administrative proceeding or remedy, or civil action related to any violation of law committed prior to July 1, 2014.”

While the federal government is not as favorable as Georgia, the current federal estate tax exemption to avoid paying federal estate taxes is still generous. After the enactment of the American Taxpayer Relief Act, signed by President Barack Obama on January 2, 2013, the federal estate tax exemption was raised to $5.25 million and the current exemption is now even higher at $5.34 million. The exemption may be doubled for married couples. Spouses can exempt up to $10.68 million due to portability. Portability of the estate tax exemption allows the surviving spouse’s estate to add to their exemption any portion of the exemption not used by the first spouse’s estate. The exemptions and portability save beneficiaries a great deal in federal estate taxes.

Overall, it is always prudent to have your estate plan re-evaluated every few years. Federal and state estate laws change periodically that can save your loved ones thousands or even millions in estate taxes, probate fees and other administration costs. For your estate planning questions, contact estate planning attorney, Michael S. Burnett at 678-905-4450 Ext. MICHAEL S. BURNETT, LLC