most expensive places to die in the US

Most Expensive Places to Die in the US

For loved ones, death is a hard process to deal with emotionally, one no one really wants to think about. But if you consider the heartache and hardships of handling the loss of a loved one and couple that with the legalities and financial cost involved, it can seem even more devastating. From settling estates, assets and other financial decisions that need to be made, many people are starting to consider things like funeral costs when planning out their retirement. Funeral costs by state vary and some might be surprised to know that some states are significantly less expensive when it comes to services related to a person passing away. While death can happen unexpectedly, the burden of planning out funerals or other services falls on the people who’ve been left behind. Good planning can help mitigate the cost of a pricey funeral service and take some of the stress off of grieving loved ones. Below we have a list of the most expensive places to die in the US. 

inheritance and estate taxes
Often, the cost associated with funerals and a loved one dying aren’t the biggest financial burden. The estate and inheritance taxes can be the bigger problem.

The Most Expensive Places to Die in the US

The average funeral costs between $6,000 and $9,000. This typically includes things like service fees, transporting of the body, embalming services, casket, funeral services, etc. While this is the average, it’s not uncommon for funeral services to exceed $10,000. This cost does not usually include medical costs associated with the passing of a loved one. While most states hover around that mark for funeral costs, the high cost of death in most places comes in the form of estate and inheritance taxes

So what’s the difference between estate taxes and inheritance taxes? To put it simply, estate taxes are levied on the total value of the deceased person’s assets, and are paid out of said assets before distribution of property or money to beneficiaries. Before an estate tax is due to be paid, the value of the assets must exceed a certain amount. This amount varies state to state, but it typically needs to exceed at least $1 million. This means only about 2% of taxpayers will be required to pay this tax. 

Inheritance tax is not a federally mandated tax, therefore if you reside in a state that imposes this tax, you’ll be required to pay taxes on your inheritance. So this tax would only be encountered if you pass away in Iowa, Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania. Inheritance tax is imposed when the deceased has divided up assets and passed them along to the beneficiaries, the tax is based on each individual inheritance. The beneficiary is then responsible for paying said taxes.

funeral costs by state
Funeral costs by state can widely vary. While funeral and medical costs are pretty consistent across the US, it’s important to be educated about estate and inheritance taxes when planning your retirement.

Exemptions on estate and inheritance taxes should be considered as well. Beneficiaries should check with their states tax laws to learn how much of their inheritance is exempt from taxation. Here are the top 10 most expensive places to die in the US based on estate or inheritance taxes.. 

  • Washington – The maximum estate tax rate is 20%!
  • Nebraska – This state’s inheritance tax is the highest of the six at 18%. The exemption amount has remained the highest as well.
  • Delaware – Following the estate tax, Delaware has a 16% maximum tax rate. It typically has a pretty large exemption amount though, and in 2017 you could exempt $5,491,000 before you were required to pay that tax.
  • Kentucky – With a 16% inheritance tax rate, you’re only allowed to benefit from a $500 exemption in this state if you’re considered a Class C beneficiary.
  • District of Columbia – Another state with estate tax, the maximum tax here is 16%. The exemption amount hovers around $1 million yearly.
  • Hawaii – Sticking with the 16% maximum tax rate, you’ll also get to utilize a hefty exemption amount. That amount has been consistently $5.49 million but is expected to rise and meet the federal estate tax exemption amount for 2019, which is $11.4 million.
  • Maryland – An inheritance tax state, Maryland’s inheritance tax rate is 16% too, but $0 can be exempt from that tax rate. Maryland is a tricky one, it also has the estate tax, at 16% with $3 million in exemptions. It ranks in the top 10 for both taxes!
  • New Jersey – New Jersey follows in Maryland’s footsteps at 16% with $0 in exemptions in inheritance tax, and 16% with $2 million for exemptions. New Jersey is also in the top ten most expensive places to die in the US for both types of taxation.
  • Illinois – Illinois is another one of the most expensive places to die in the US. With a maximum estate tax rate of 16%, with $4 million worth of exemptions.
  • Massachusetts – The 10th priciest place to die in the US is Massachusetts. With 16% in estate taxes, only $1 million is exempt. 

When you’re thinking about the cost involved with passing away, the funeral and medical costs may be the least of your financial worries. Planning your retirement in places that have considerably lower estate and death related taxes can help alleviate the financial burden you leave behind. If a friend or loved one has recently passed away and you need certified copies of death certificates to help get through the estate process, VitalChek can help

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