States That Will Not Tax Your Death

The following article provides state-by-state information on the death tax, including Ohio. Not that you’re going to move to avoid death tax, but it is always good to prepare your heirs for what may or may not happen. Published
by Kiplinger on 8/26/26, it was written by Katelyn Washington, with contributions by Kate Schubel. While most readers of these posts are likely living in Ohio, I’ve kept the full list of states so you have it for reference and share it with friends or family
in other states.

“How much will your children or other heirs pay when you die? That depends, in part, on whether you live in a state with
no death tax.

The “Great Wealth Transfer” is continuing its historic sweep across the American economy in 2026. According to recent estimates, older generations (mainly baby boomers) are expected to transfer $124 trillion to younger generations
and charities by 2048, with $2.5 trillion getting passed down this year alone.

And all that wealth could be subject to the tax man.

While federal estate tax exemptions remain high (a $15 million threshold for 2026), some state estate tax exemptions aren’t so generous. And others impose another type of death tax, known as an inheritance tax.

Paying state death taxes can become very expensive for the loved ones you leave behind, but you might save them some money if you live — and have assets in — the states on this list. Read on.

What is ‘death tax’?

Death taxes are tax liabilities incurred by your heirs when you die. Federal death taxes don’t apply unless you leave your heirs a multi-million dollar estate. But in some states, heirs pay death taxes on even small inheritances.

For example, some types of heirs in Nebraska pay a death tax rate of 15% on inheritances over $25,000. The good news is you don’t have to worry about state death taxes if you live in a state without an estate tax or inheritance
tax.

States with no inheritance or estate tax

The states on this list have no death taxes. However, keep in mind that not every state is as tax-friendly when it comes to other taxes and fees or the overall cost of living. For example, although New Hampshire is on this list,
property taxes in the state can be relatively high (see the analysis at the end of this article).

So if taxes are a primary consideration for where you live, weigh the pros and cons and consult your financial advisor or a qualified tax professional before making any big moves.

Alabama

Alabama has no death taxes, which will make your heirs happy. And although you’ll pay tax on groceries in this state while you’re still alive, Alabama recently reduced the rate to 2%. Ergo, going shopping may be a little less
expensive than it used to be.

The Cotton State also has one of the lowest property tax rates in the U.S. So if you’re a homeowner, you might save even more in taxes.

Alaska

Alaska residents can transfer assets to heirs tax-free when they die. You might even be able to leave your loved ones more than you had planned if you move to The Last Frontier. That’s because Alaska will pay you to live there.

You could receive a payment through the state every year through the Permanent Fund Dividend.

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  The most recent payment amount was $1,000.

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  That means if you received that amount every year, you’d have an extra $25,000 over the course of 25 years, which is sure to make your heirs excited.

Arizona

What’s not to love about Arizona? There aren’t any death taxes, and you’ll even pay a low income tax rate while you’re living out your days. That’s because the state imposes a flat income tax rate of only 2.5%. That’s especially
good news if you’re a high earner.

Arkansas

Arkansas might not be your first thought for relocation, but there’s a possibility for tax savings if you do choose this state as your new home.

Not only is there no estate or inheritance tax in the Bear State, but the top income tax rate was reduced in recent years to 3.7%. More tax savings could mean more money for the loved ones you’ll leave behind one day.

California

You probably haven’t thought about moving to California for tax savings since it’s generally a high-tax state. But your heirs won’t pay any death taxes, and your property taxes might soon be more affordable due to the recent
SALT deduction cap, saving Californians thousands.

However, California’s mansion tax is one of the highest in the U.S., with a tax of up to 5.5% on properties sold in certain areas.

Colorado

Death taxes are nonexistent in Colorado, and some residents of the Centennial State will benefit from tax savings before they pass away, thanks to a new Colorado tax credit enacted last year.

Additionally, the Centennial State sends property tax relief in the form of Colorado TABOR refunds, which could really add up for you and your heirs.

Delaware

There are plenty of pros to taxes in Delaware. Of course, there is no estate or inheritance tax in the state since it’s on this list. And there’s no state sales tax in Delaware, either.

Property taxes in the state are on the low end, too. So, both you and your heir can enjoy the tax breaks the state has to offer.

Florida

In addition to Florida offering several cheap places to live, residents may also enjoy major tax savings. For example, the state has no death taxes, no income taxes, and no sales tax on groceries or prescription drugs.

Plus, Florida recently amended the standard homestead exemption to adjust a portion annually with inflation, though voters will decide on a massive expansion of the exemption on the November ballot.

Georgia

You don’t have to worry about your heirs paying a big state tax bill if you die in Georgia. There is no estate or inheritance tax in the state.

Additionally, Georgia won’t tax your Social Security benefits, and qualified retirement income is taxed at a recently lowered 4.99% rate. Each year, the tax rate is set to be lowered by 0.125% (if certain revenue targets are
met) until the rate hits a floor of 3.99%. If so, that might mean more money for you — and your heirs.

Idaho

Idaho might not be the most popular retirement destination since the state taxes some common types of retirement income, including pensions. But your children won’t have to pay the state when claiming their inheritance in the
Gem State.

Idaho also recently reduced its flat income tax rate, which is good news for higher earners. You’ll pay a 5.3% income tax rate regardless of how much you make.

Indiana

Indiana doesn’t have death taxes, and you may be able to pay less taxes while you’re still alive, too, depending on which part of the state you live in. That’s because Indiana has a fairly low flat-income tax rate of 2.95% for
the tax year 2026. However, counties can impose income taxes of their own.

Kansas

Kansas is another state with no estate or inheritance tax.

However, residents of the Sunflower State could pay some hefty taxes when it comes to everyday purchases, since Kansas has one of the highest sales tax rates in the country
(though groceries are exempt from the state sales tax rate).

Louisiana

Louisiana imposes low taxes in many areas. For example, there are no death taxes, and motorists pay some of the lowest gas tax bills in the country.

However, some taxes in Louisiana aren’t so appealing, such as the state’s sales tax, which is higher than in most states. So, you’ll want to weigh the pros and cons before moving to Louisiana for tax savings.

Michigan

If you enjoy the colder weather and don’t want your heirs to pay taxes on their inheritances, you might want to consider a move to Michigan.

There is no estate or inheritance tax in the Wolverine State, and Michigan has a flat income tax rate of 4.25%.

Mississippi

Mississippi is a state that taxes groceries, but it won’t tax your death since the state has no estate or inheritance tax.

And Mississippi has a flat state income tax rate of 4% as of 2026 on taxable income over $10,000. That’s a recent reduction, which is good news for the wealthy and everyone else, too.

What’s more, the state’s income tax rate is set to cut down to 3% by 2030, with scheduled drops each year until finally hitting 0%
(if certain revenue targets are met).

Missouri

Your loved ones won’t pay any state death taxes in Missouri, and you won’t pay any state tax on your Social Security benefits. The Show-Me State has a graduated income tax with a top marginal rate of 4.7%. This top tier applies
to individual taxpayers with a taxable income over approximately $9,400, which makes it an effective flat tax for many.

Montana

Montana doesn’t have death taxes and is one of the states with no sales tax, which includes items like groceries, clothing, and prescription drugs.

And while income tax rates in Montana aren’t as high as in some states, they aren’t the lowest in the country, either.

Nevada

Nevada doesn’t tax your heirs’ inheritance, and it also happens to be one of the states with no income tax. To make Nevada even more appealing, residents enjoy fairly low taxes compared to other states. So, there is a lot of
potential for tax savings if you live in Nevada.

New Hampshire

New Hampshire doesn’t impose death taxes. And if you plan to make your fortune by winning the lottery, you’re in luck. New Hampshire is one of the states that won’t tax your Powerball winnings.

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  There is no personal income tax in New Hampshire.

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  There is also no state sales tax in The Granite State.

However, property taxes can be quite high. Recent property tax changes saw some New Hampshire Mobile Home and Condo taxes triple.

New Mexico

If you’ve had your eye set on the Southwest, New Mexico could be a good contender for relocation. Your heirs won’t pay a dime to the state when you die since there is no estate or inheritance tax.

Additionally, high earners won’t pay more than a 5.9% income tax rate in the Land of Enchantment. That’s much lower than in some states.

North Carolina

There are no death taxes in North Carolina, which should make your heirs happy. Additionally, North Carolina income tax cuts are coming, and low property taxes in the state might make you happy, too.

Although groceries aren’t taxed by the state, watch out for those pesky local sales taxes when you grocery shop in North Carolina.

North Dakota

Not paying an estate or inheritance tax is just one of the tax benefits of living in North Dakota. For example, the highest income tax you’ll pay is 2.5%, and thanks to legislation enacted in recent years, some filers are exempt
from paying any state income tax at all. Property tax and sales tax rates in North Dakota are reasonable, too.

Ohio

Your heirs won’t pay anything in Ohio on their newly acquired assets when you die since there are no death taxes in the state.

But they might pay some hefty taxes later. That’s because property taxes in Ohio are higher than in most states
(though there’s a push in Ohio to end property tax). So, you might want to keep that in mind when leaving behind real estate
(more on that below).

Oklahoma

Oklahoma may be an appealing state to grow your wealth. After all, you can transfer your assets to heirs tax-free after your death. And property tax rates are below average in Oklahoma, too. Income tax rates in the Sooner State
could also benefit high earners since they never reach above 4.5%.

South Carolina

Your loved ones won’t get a tax bill from South Carolina when you’re gone since the state doesn’t have any estate or inheritance taxes. There are other things to like about taxes in South Carolina, too.

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  For one thing, the property tax rate in South Carolina is one of the lowest in the nation.

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  And while there are sales taxes in the state, they are reasonable when compared to the rest of the country.

South Dakota

There are no death taxes in South Dakota, and sales taxes are pretty low, too. However, the state does tax some essential items, such as groceries and clothing.

Even so, you’re likely to spend less on state taxes, since South Dakota is a state with no income tax. And who doesn’t love making tax-free money (at least at the state level)? The IRS will still take its share, of course.

Tennessee

There are a few things to love about living — and dying — in Tennessee. Besides not having an estate or inheritance tax, this state also won’t tax your income. So, it’s a win-win for you and your heirs.

However, the Volunteer State does tax groceries, so that’s something to keep in mind before relocating to one of the cheapest places to live in Tennessee.

Texas

Not having to pay state income tax is just one reason some might choose to live in Texas’s most affordable places. But sparing heirs from paying death taxes may be another since there aren’t any in the Lone Star State.

And while Texas property taxes can be quite high (the median tax bill is about $4,232), they are less than in some other states that don’t tax retirement income.

Utah

Becoming a resident of Utah could benefit your heirs when you die since there are no death taxes in the state. However, you might find living in the state a little less affordable in some tax areas. For example, Utah is one
of only eight state that still taxes Social Security retirement benefits. Paying that extra income tax is definitely a con to living in the Beehive State.

Virginia

While Virgina isn’t known for being the most tax-friendly place to live, it isn’t necessarily the most high-taxed, either. Depending on where you reside, sales taxes can be quite low, and there is no estate or inheritance tax
in Virginia.

Additionally, the commonwealth may have some cheap annual property tax bills in the more affordable places to live in Virginia. Moving to one of these areas might provide savings for you and your heirs.

West Virginia

West Virginia may not be the most popular retirement spot, but residents can enjoy many tax benefits in the state. Of course, there are no death taxes in West Virginia since it has made this list. But homeowners in the state
also pay generally lower property tax bills than in most other states.

Wisconsin

In Wisconsin, your loved ones won’t have to pay a state inheritance or estate tax. And state tax changes made in recent years include repealing Wisconsin’s personal property tax. But you might find living there less appealing,
between generally high property taxes and income tax rates that are higher than in most states on this list.

Wyoming

Wyoming might be a good choice if you’re looking to relocate. For one thing, it was ranked by Kiplinger as one of the best states for middle-class families, due to the state’s generally low tax burden.

Of course, there are no death taxes in Wyoming, which makes it very tax-friendly for your heirs, regardless of your net worth.”

*Note: Cost of living, quality of healthcare, and overall tax landscape may be deciding factors when considering a move. Local and municipal property taxes may also apply. Consult with a finance or tax professional on whether
relocation is right for your financial situation.

So, if you live in Ohio, as I do, it is good news regarding a death tax, but not so good news regarding property tax. Of course, I’m not encouraging anyone to
relocate to avoid taxes, but I think it is interesting to see how taxes vary state to state. And in some states, the old saying, the only sure things are death and taxes, carries a double whammy.

 

All said, working with an experienced estate planning attorney can help you understand all of this and more. Legal tools can help protect your loved ones and
hard-earned assets, but it takes someone with a deep understanding of the law to maximize the opportunities. If you are considering updating your plan, or starting one, please call me to schedule a meeting. Together, we can create a plan ideally suited to
meet your goals and protect your loved ones. You can reach me at 513-399-7526 or visit my website,
https://www.davidlefton.com, for more information.

 

Source: Kiplinger online; 8/26/26 Written by Katelyn Washington, with contributions by Kate Schubel.