Estate planning helps families avoid legal disputes and confusion after the death of an individual. It is the process by which an individual lays out a plan to manage and distribute his or her assets after one’s death. It is an important legal plan that safeguards assets and ensures that the right recipients get them. However, estate tax planning is not easy, as it involves many components, like last wills, testaments, trusts, power of attorney, living wills, legal beneficiary designations, and more. Moreover, estate taxes vary from state to state.
The residents of Georgia are not subject to complex processes when it comes to estate planning. Still, many moving parts can be confusing for those doing it for the first time. To guide you through Georgia estate tax planning, this article explains the current laws and the planning strategies that can safeguard an estate in Georgia.
Estate Tax in Georgia
Georgia does not have a separate state-level or inheritance tax. It only supports the federal estate tax if the value of the estate exceeds the set thresholds.
Does Georgia Impose a State Estate Tax?
Georgia does not impose a state estate tax. It is one of the 38 states in the U.S. that levies no state estate tax. However, the federal estate tax is applicable. Similarly, another state’s inheritance tax will apply to Georgia’s residents.
Inheritance Tax in Georgia
Inheritance tax is different from estate tax. To clarify, the estate tax is a tax levied on a deceased person’s estate if the income exceeds threshold limits. It is also called “death tax” and is levied before it is inherited by the recipients. On the other hand, the inheritance tax is applied to a person’s heirs after they inherit the property from a deceased person.
There is no inheritance tax in Georgia. However, another state’s inheritance tax may apply to Georgia’s residents. For example, in Pennsylvania, the inheritance tax applies to out-of-state residents as well. If one or more of the residents are in Georgia, they have to pay this inheritance tax.
Historical Changes: Repeal and What It Means Today?
Georgia’s tax code is aligned with federal law. Before 2005, the federal government provided a credit against the federal taxes paid to a state. This meant that the taxpayer paid a certain amount as estate tax, and a portion of this payment went to the state. When this federal credit was eliminated, Georgia’s estate tax also got eliminated by default, since the state’s tax requirement was tied to this credit.
Federal Estate Tax Considerations for Georgia Residents
Though Georgia has no estate tax, its residents have to adhere to the federal estate tax requirements.
Federal Exemption Amounts & Thresholds (2025)
The federal estate tax exemption is $13.99 million in 2025 for individuals, up from $13.61 million in 2024. Married couples can combine their exemptions, resulting in an exemption amount of $27.98 million for 2025. The tax rate after the exemption for 2025 is:
- 18% for the first $10,000
- $1,800 + 20% from $10,001 to $20,000
- $3,800 + 22% from $20,001 to $40,000
- $8,200 + 24% from $40,001 to $60,000
- $13,000 + 26% from $60,001 to $80,000
- $18,200 + 28% from $80,001 to $100,000
- $23,800 + 30% from $100,001 to $150,000
- $38,800 + 32% from $150,001 to $250,000
- $70,800 + 34% from $250,001 to $500,000
- $155,800 + 37% from $500,001 to $750,000
- $248,300 + 39% from $750,001 to $1,000,000
- $345,800 + 40% of all income over one million
How Federal Estate Tax Affects Georgia Estates
Georgia residents must pay the federal estate tax if the value exceeds the above thresholds. Assets that are included for the calculation of the estate tax are:
- Real estate property
- Investment accounts
- Retirement accounts
- Life insurance proceeds of the deceased
- Business interests and liquidation
The combined net worth of all these assets will be used to calculate the exemption limits and taxes.
Estates With Out-of-State Assets or Multi-State Issues
If Georgia residents hold estates in other states that impose estate or inheritance tax, like Maryland and Oregon, they will have to pay the tax based on the local rules of the other state. If the estate is spread across multiple states, then the resident must coordinate the legal and tax planning to avoid double taxation.
Out-of-state property is another aspect that can trigger an ancillary probate. This is a legal process that is initiated to handle the property owned by a deceased person in a state, which is not the primary state of residence. This is a common consideration for Georgia residents who own a second home or property in other states.
All these calculations are complex and time-consuming. This is where it helps to hire experienced CPAs like Manay CPA, who are experienced in handling estate taxes.
Key Estate Planning Strategies for Residents of Georgia
Estate planning is a critical process that every individual must undertake to ensure that the income earned through one’s lifetime is passed on to the right recipients and causes. When the process is well-planned and executed, along with the appropriate documents, the administrative costs come down and the inheritance becomes predictable for the heirs.
Gift Strategies, Trusts and Other Tools to Preserve Wealth
There are many ways to reduce the taxable income and preserve wealth. Some common strategies are:
- Annual exclusion gifts, subject to an annual cap each year
- Irrevocable trusts
- Life insurance trusts
- Annuity trusts
- Family limited partnerships
Using a combination of the above strategies will preserve wealth and offer a structured path to their heirs.
Business Succession and Real Estate Ownership Considerations
Individuals can use tools and plans to ensure a clear succession path for heirs to avoid disputes. It can also reduce the federal estate tax. Some possible tools include buy-sell agreements, valuation planning, business-focused trusts, annuity trusts, and more.
Another important consideration is the ownership structure. Individuals with substantial wealth must decide if they want to opt for joint ownership structures, transfers after the death of the individual, or the use of trusts to transfer the title of properties. It depends on individual preferences, the number of heirs, the kind of property that is a part of the estate, relationships among heirs, and the location of properties. Such planning can reduce probate issues if the estate spans across multiple states.
Aligning Estate Plan with Federal Rules While Benefiting from Georgia’s State Rules
As Georgia doesn’t impose rules, estate owners have more flexibility. They can plan ahead to use federal gifting rules and transfer a certain sum to heirs each year. Also, they can leverage lifetime exemptions and trusts to reduce the taxable estate valuation.
In particular, Georgia residents can make use of the following to further bring down their taxable income:
- Lower cost of estate planning through firms like Manay CPA
- Simpler probate rules when compared to states like New York
- No state-level estate or inheritance tax
What Georgia Residents Must Watch For
There are a few aspects that Georgia residents must consider while doing estate planning, as these decisions can impact taxes and the ease of transition.
Multi-State Property & Residency Complications
When a property owner moves between states for work or other reasons, the owner must determine the domiciled state at the time of death. Some states levy estate taxes, and if the owner has lived in any of these states, then it could trigger a state estate tax in addition to the federal tax. If the owner has to prove that Georgia is the primary state of residence, it must be backed by documentation, like the amount of time spent in Georgia and the business or work interests in this state. Such documentation will prove that Georgia is the primary state, which in turn can exempt the estate taxes of other states.
Potential Tax Changes & Legislative Risks
Though there is no estate tax today, this can change in the coming years, and Georgia may also have its own estate and inheritance tax. Additionally, the federal estate tax can also change. For example, the Tax Cuts and Jobs Act of 2017, which doubled the federal estate tax exemption, is set to expire in 2025. If this is not extended, the exemption can be cut in half, which is roughly $7 million.
At the same time, the One Big Beautiful Bill Act has made the higher exemption permanent and increased the baseline amount. It remains to be seen how these two together will impact the estate tax in 2026 and beyond.
Working With Professionals: Attorneys, CPAs, and Financial Advisors
Given the confusing nature of estate and inheritance taxes, it’s best to take the help of professionals like CPAs, who are well-versed with the rules and stay on top of the upcoming changes. More importantly, they are experienced in handling multiple estates and their planning, and can help with your estate as well. These professionals can suggest the best options based on your circumstances and can even draft wills and trusts for you.
Tax-Planner’s Checklist for Georgia Estate Planning
Estate planning is key to inheritance, and individuals must start as soon as possible, so they have greater flexibility and options to transfer money to their chosen recipients. Below are a few checklist items to consider for Georgia estate planning.
Reviewing Current Estate Plan and Asset Structure
As a first step, review the existing assets and their structure and valuation. Make a note of the assets, the potential beneficiaries of the asset, and additional steps that must be taken, like granting power of attorney, drafting wills, creating real estate deeds, and more. The core aspect of this exercise is to ensure that the assets match the intent of the estate plan and meet the legal requirements of federal taxation laws.
Updating to Reflect Federal Exemption Levels & Georgia-specific Facts
Since Georgia has no estate tax law, the plan must reflect the federal exemption rules. While planning, consider the known changes that could impact the estate in the near future. Also, if the estate wills were created before 2005, they can contain outdated language. In such cases, it’s important to update them to reflect the current situation. Moreover, they must adhere to the federal limits.
Communicating Plan With Heirs and Preparing Executors
Finally, communicate the estate plan to heirs and executors. They must know:
- Where are the documents stored?
- What kinds of property are in the estate?
- How are the properties titled?
- What steps occur during probate (if required)?
- Who is the executor and the primary contact details?
Such clear communication reduces the chances of conflicts among heirs and reduces legal disputes. Also, it brings down delays in transferring the property.
FAQs
Do all estates have to go through probate in Georgia?
No, not all estates have to go through probate in Georgia, as it applies to those that are owned solely by the deceased. Assets that have designated beneficiaries, any property with joint ownership, or those that are placed in trusts need not go through probate. A salient aspect is that the probate process is simple in Georgia when compared to many states.
Do cars go through probate in Georgia?
Yes, cars go through probate if they were owned solely by the deceased. However, it can be avoided with joint ownership with a survivorship right. Also, if it has a clear “transfer on death” beneficiary or if there is a surviving spouse, then no probate is needed. Additionally, if the value of the car is under $40,000 and if an affidavit is filed with the Title Bureau, no probate is needed.
Is there a difference between an estate tax and an inheritance tax?
Yes, they are two different taxes. An estate tax is a tax that is paid by the estate before the proceeds are distributed to beneficiaries. On the other hand, an inheritance tax is a tax paid by the beneficiaries after they inherit the property. Georgia does not impose either tax, making it easy for estate planners. However, they are still subject to the federal estate and inheritance taxes.
