Calculate federal and state estate taxes for Kentucky (KY)
✅ No State Estate Tax ⚠️ Inheritance Tax: 4%-16%Kentucky imposes an inheritance tax on non-immediate family members. Class B beneficiaries (nieces, nephews, etc.) pay 4%-16%. Class C (unrelated) pay 6%-16%. Spouses, children, parents, and siblings are exempt.
Gift up to $19,000 per person per year (2026) without using your lifetime exemption. A married couple can give $38,000 per person.
Remove life insurance proceeds from your taxable estate by placing the policy in an ILIT. This can save 40% in estate taxes on the insurance proceeds.
Receive income during your lifetime, then pass the remainder to charity — reducing your taxable estate while generating income.
Transfer appreciating assets to heirs at reduced or zero gift tax cost. Ideal for assets expected to grow significantly.
A surviving spouse can use the deceased spouse's unused federal exemption — effectively doubling the exemption to $27.22M for a married couple.
Kentucky imposes inheritance tax on certain beneficiaries. Consider trusts or changing beneficiary designations to minimize the 4%-16% inheritance tax.
No. Kentucky does not impose a state estate tax. Only the federal estate tax applies to estates exceeding $13.61 million.
Yes. Kentucky imposes an inheritance tax at rates of 4%-16%. The tax depends on the beneficiary's relationship to the deceased.
The federal estate tax exemption for 2026 is $13.61 million per individual ($27.22 million for married couples using portability). Estates below this threshold owe no federal estate tax. Note: This exemption is set to be cut roughly in half after 2025 under the Tax Cuts and Jobs Act sunset — check current law.
Estate tax is paid by the estate before distribution. Inheritance tax is paid by the individual beneficiaries after they receive their inheritance. The rate often depends on the beneficiary's relationship to the deceased.
Common strategies include: annual gifting ($19K/year per person), charitable donations, irrevocable trusts (ILITs, GRATs, CRTs), spousal portability, and potentially relocating to a state without estate/inheritance tax.