12 States With Biggest Estate Tax Bills

Death and taxes are both inevitable, but the amount of federal estate taxes the wealthy pay when they die varies widely from place to place. The Internal Revenue Service has shown where the highest estate tax bills are — due to some combination of great wealth and intentional or unintentional failures to minimize taxes — in its state individual income tax tables for federal fiscal year 2023. Federal estate taxes per estate tax return filed ranged from $65,413 in Iowa, up to more than $4.3 million, with a median of $420,531. The list does not include state estate or inheritance taxes. High estate taxes per return could correlate with a state's tax planning culture and residents' access to tax planning opportunities. For a financial professional, state estate tax data could:

• Show where many clients wealthy enough to leave potentially taxable estates are located.
• Identify pockets of unmet planning needs. If the average estate tax collection in a state is big, is that simply because many people there leave large estates, or does it reflect holes in estate planning strategies?
• Indicate where more life insurance may be needed, both to structure estates to minimize taxes and to provide the cash beneficiaries and heirs need to pay the estate taxes.
• Reveal where clients may have a specialized income planning needs, such as for private placement variable annuities.

For a look at the highest estate tax bills per estate tax return filed in 2023, see the gallery above. Credit: Adobe Stock