Governor Chafee signed off on the FY 2015 budget which among other things, will increase the Rhode Island estate-tax exemption amount from the current level of $921,655 to $1,500,000 for all people dying on or after January 1, 2015. This amount will continue to be adjusted annually for inflation.

Before this increase, RI was one of the worst states in which to die, behind only New Jersey whose exemption amount is $675,000. With the increase to $1,500,000, RI is now pretty much in the middle of the pack out of those states that have an estate tax.

In addition, the new estate tax provision eliminates the so-called “cliff tax”. The cliff tax stated that the estate is taxed on the entire value of the estate even if the value exceeds the exemption amount by even one dollar. After 1/1/15, the tax will only apply on the amount above and beyond the $1,500,000 exemption amount.

For more information on the new RI estate tax exemption amount please contact us.