Federal Estate Tax

The material found on this site is for general information only. Concepts included on this site dealing with federal estate tax issues may not be the most acceptable or best solutions to your situation. You should consult your attorney for advice on your particular situation.

The Federal Estate Tax is a tax on the transfer of property at your death. It consists of an accounting of everything you owned or had certain interests in on the date of your death. Sometimes, the federal estate tax is dismissed as a non-issue because people think they have to be rich before they are taxed. However, did you know that everything you own, possibly including your retirement plans and life insurance proceeds, is includible in your gross estate and that federal estate taxes begin on estates valued at $5,340,000.

Fortunately, there are a number of estate planning tools available that can be utilized to reduce, and possibly eliminate, the federal estate tax.

2014 Federal Estate Tax Applicable Exclusion Amount
$5,340,000 Exemption Per Person
40% Federal Estate Tax Maximum Rate

2014 Annual Gift Tax Exclusion
$14,000 Individual
$28,000 Husband and Wife
Annual gift tax exclusion - You may give as much as $14,000 per year to any number of individuals without incurring federal gift tax and without having to file a gift tax return. If your spouse consents to the gift, you can give up to $28,000 to each individual, without incurring federal gift tax, but a gift tax return must be filed.

2014 Non-grantor Trust and Estate Income Tax Rates

Taxable Income The tax is: Of the amount over:
$ 0 but not over $2,500 15% $0
$2,500 - $5,800 $375 +25% $2,500
$5,800 - $8,900 $1,200 +28% $5,800
$8,900 - $12,150 $2,068 +33% $8,900
Over $12,150 $3,140.50 +39% $12,150


This information is provided as a guide only. It is not intended to constitute tax or legal advice. This chart represents State Farm's understanding of the tax laws in effect on the printing date. You should contact your qualified tax advisor for specific advice.

Neither State Farm® nor its agents provide tax or legal advice.
State Farm Life Insurance Company
(Not Licensed in MA, NY or WI)

State Farm Life and Accident Assurance Company
(Licensed in NY and WI)
Home Office, Bloomington, Illinois

IL - 28.7