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Effective July 1, 1997, the State of Indiana inheritance tax exemptions for a person's direct ancestors and direct descendants has been increased to $100,000 per person. A surviving spouse still receives a 100% exemption for all assets passing to such spouse. This should significantly lessen the death taxes individuals are required to pay and, in many instances, may eliminate the need to file a state inheritance tax return at a person's death. The old exemptions ranged from $2,000 to $10,000 depending upon the relationship between the decedent and the recipient of the gift. Now, all direct descendants and ancestors receive a $100,000 exemption. An example will help illustrate the new provisions. If a person dies with an estate valued at $400,000 which is divided equally to 4 adult children, there would be no inheritance tax because each child has a $100,000 exemption. Under the old law, the total inheritance tax would have been approximately $8,400. The legislature did not modify the exemptions for other beneficiaries. Brothers, sisters, nieces, nephews, and children-in-laws only receive a $500 exemption. Unrelated beneficiaries (including step-children) receive only a $100 exemption. § |
