For many Georgia families, estate taxes feel like an issue only for the ultra-wealthy. However, the reality is more complicated, and understanding how these taxes work is an important step in effective estate planning. Even though Georgia doesn’t impose a state-level estate tax, federal estate taxes could still apply, depending on the size of your estate.
Planning ahead ensures more of your hard-earned assets are passed on to your family and less is lost to tax liabilities. Chandler Law has helped Georgia residents simplify estate planning and create tax-efficient strategies tailored to their unique circumstances.
What Is an Estate Tax?
Estate Tax vs. Inheritance Tax
An estate tax rate is calculated based on the total value of your assets at the time of your death. Think of it as a toll your estate may need to pay before the remainder is distributed to your heirs.
An inheritance tax, by contrast, is levied on individuals who receive money or property from an estate. The key difference? Estate taxes are taken out of the estate itself, while inheritance taxes are paid by the recipients.
Federal vs. State Estate Taxes
At the federal level, estates valued above a certain threshold are subject to the IRS’s estate tax, which currently maxes out at 40%. Currently, for 2025, the federal estate tax exemption is $13.99 million per individual and $27.98 million for married couples. However, the current exemption amount of $13.99 is set to sunset at the end of 2025. After 2025, the federal tax exemption amount is expected to return to an estimated $7 million.
Georgia, on the other hand, does not have its own state-level estate tax. This means you’ll only need to worry about the federal threshold when planning your estate.
Does Georgia Have an Estate Tax?
The Short Answer
No, Georgia does not impose an estate tax. The state phased out its connection to federal estate tax rules in 2005, officially eliminating Georgia’s estate tax requirement.
Why the Confusion?
Despite the lack of a state estate tax, many people mistakenly believe Georgia still imposes one. This confusion often arises from outdated information online or misunderstandings about other costs, such as probate fees, which are completely separate from estate taxes.
Who Should Still Be Concerned About Estate Taxes?
High-Net-Worth Individuals
If your estate’s total value exceeds the current federal exemption of $13.99 million, the federal estate tax will apply. For estates that surpass the threshold, tax rates can be as high as 40%.
| Estate Value | 2025 Taxable Amount (Above $13.99M) | Approximate Tax Due |
|---|---|---|
| $14M | $10,000 | $4,000 |
| $20M | $6.01M | $2.40M |
Married Couples, Business Owners, and Property Holders
Even if you don’t feel “wealthy,” it’s easy to underestimate your estate value. Adding up retirement accounts, life insurance payouts, business ownership, and real estate can quickly breach the federal exemption limit. If you’re married or own property in Georgia, review your total net worth to understand your estate tax exposure.
Estate Tax Exemptions & Planning Strategies
Key Federal Exemptions
- Individual and Marital Deduction: Each person can exclude up to $13.99 million from their estate before federal taxes apply. Spouses typically avoid federal estate tax on inheritances thanks to the unlimited marital deduction.
- Portability Rule: If one spouse passes away and doesn’t use their full exemption, the surviving spouse can apply for the unused portion, doubling the exemption for married couples.
Tools to Reduce or Avoid Estate Tax
- Trusts
- Revocable Living Trusts protect privacy and help expedite asset distribution while avoiding probate.
- Irrevocable Life Insurance Trusts can remove assets out of your taxable estate entirely.
- Gifting Strategies
- The IRS allows annual gifts of up to $17,000 per recipient without reducing your lifetime exemption.
- Take advantage of the lifetime gift tax exemption for significant tax savings.
- Charitable Donations
- Donating a portion of your estate to charity can reduce its taxable value.
- Family Limited Partnerships (FLPs)
- Transfer ownership of assets to family members while retaining operational control and minimizing tax exposure.
Misconceptions About Estate Tax in Georgia
“Estate Tax = Inheritance Tax”
Many people confuse these terms. Remember, Georgia doesn’t impose either an estate tax or an inheritance tax.
“My Estate Isn’t Big Enough to Worry About It”
It’s easy to underestimate your estate’s value. For example, life insurance policies, investment portfolios, and real estate often push your estate’s worth higher than expected.
“Trusts Are Only for the Wealthy”
Trusts aren’t just tax-saving tools for the elite. They’re practical for anyone who wants control over how their assets are distributed, minimize probate costs, or maintain privacy.
Estate Tax vs. Probate Costs in Georgia
What Is Probate?
Probate is the court-supervised process of validating a will, settling debts, and distributing assets. While it isn’t a tax, it can involve fees, delays, and public disclosure of your estate. If a dispute arises regarding the estate, additional attorney fees and expenses will become necessary.
Reducing Probate Costs
Strategies to minimize probate include naming beneficiaries, using transfer-on-death (TOD) designations, and creating a living trust.
What Happens If Someone Dies Without a Will?
If you die without a will in Georgia, known as “dying intestate,” your estate will be distributed according to Georgia law, which may create unintended tax implications or disputes among family members.
What You Can Do to Minimize Estate Tax Exposure
Step-by-Step Guidance
- Create or Update Your WillEnsure your wishes are legally documented.
- Evaluate Your Total Net WorthAccount for all assets, including retirement accounts and life insurance.
- Explore Trusts and Gifting StrategiesUse other estate‑planning tools to optimize tax efficiency.
- Consult an Estate Planning AttorneyA local attorney can provide tailored advice based on Georgia’s laws and your unique goals.
Why Local Legal Help Matters
Estate planning isn’t one-size-fits-all. Federal tax laws, state probate regulations, and family dynamics vary widely, making personalized advice essential.
FAQs About Georgia Estate Tax
What is included in a taxable estate?
Real estate, financial accounts, investments, life insurance, retirement savings, and business ownership.
How can I avoid probate in Georgia?
Use living trusts, beneficiary designations, and TOD registrations.
Who pays the taxes if there’s no will?
The estate itself is responsible for paying any owed taxes.
Passing on More Than Wealth
Most Georgia families won’t face estate tax, but estate planning helps protect your assets from unnecessary costs and complications. With the right strategy, you can preserve your legacy and provide peace of mind for the next generation.
