If you’re a Minnesotan making plans to distribute your assets when you die, you should be aware of stipulations unique to your home state.


That’s especially true if your assets exceed $1.6 million. That’s when the home of the Vikings starts imposing its own estate tax, even if your worldly belongings don’t qualify for federal estate taxes. It was one of four states to increase its exemption last year, with plans to expand it incrementally to $2 million by 2018.


Minnesota is one of 16 states and Washington D.C. to impose any kind of estate tax. As of last year, the tariff was affecting about 800 estates annually.


Other state laws you should know:

  • Out-of-state residents may be subject to Minnesota estate tax if they own assets in Minnesota.
  • Though Minnesota does not impose a gift tax, the federal limit on lifetime gifts given per person is $5.43 million each, which can apply separately to you and your spouse. Annual gifts to individuals of $14,000 or less do not count against the $5.43 million.
  • Certain small businesses and farms qualify for a $5 million exemption if left to a family member. The business must not be publicly traded or exceed $10 million in gross sales. You or your spouse must participate in the business, which must be owned for three years prior to your death. Additionally, the inheritor must participate for three years afterward. Guidelines for a farm are similar if it’s classified "agricultural homestead."
  • Minnesota returns must be filed within 15 months of death and include federal estate tax returns even if they’re not required by the IRS. However, estimated state taxes are due nine months after death, with penalties and interest accruing on the unpaid amount. Extensions are possible. Professional filing assistance is advised.


Still confused? Minnesota estate taxes can be complex; for more information, contact a Boulay advisor at 952-893-9320 or learnmore@BoulayGroup.com, or access the Minnesota Revenue Department at http://www.revenue.state.mn.us/Pages/default.aspx.


File Download: Minnesota - Home of the Substantial Estate Tax