Indiana Estate
Tax Calculator

Indiana does not impose a state estate tax. Indiana formerly had an inheritance tax, which was repealed effective January 1, 2013.

Since then, estates of Indiana decedents face only the federal estate tax. The repeal of the inheritance tax made Indiana more competitive with neighboring states for retaining high-net-worth residents.

Indiana's economy includes significant manufacturing, agricultural, and pharmaceutical sector assets. Closely held business succession planning is a major component of Indiana estate planning, even without state-level transfer taxes.

Indiana residents are subject only to the federal estate tax. The **$15 million** exemption with portability for married couples ($30 million combined) and a **40%** top rate applies.

No state estate or inheritance tax return is required.

Indiana's inheritance tax repeal applies to deaths after December 31, 2012. Estates of decedents who died before that date may still have pending inheritance tax matters.

Indiana is a common-law property state. The surviving spouse has an elective share right under IC 29-1-3-1, which provides one-third or one-half of the net estate depending on whether there are surviving descendants.

This right must be factored into estate plans that use trusts to minimize federal estate tax.

Indiana farm estates frequently use entities (LLCs, partnerships) for land ownership, which can provide valuation discounts for federal estate tax purposes. Indiana's family farm land assessment (IC 6-1.1-4-13) provides favorable property tax treatment but does not directly affect estate tax.

Evaluate whether IRC 2032A special use valuation provides additional federal estate tax reduction.

Evaluate federal estate tax exposure for Indiana estates, including closely held business valuations and agricultural land. Use this calculator free for all states.

Because Indiana does not impose a state estate tax, the federal estate tax is the only transfer tax layer. The current federal exemption of $15 million per individual (2025) shelters the vast majority of estates.

However, estates that exceed this threshold face a top marginal rate of 40%, making federal planning essential for high-net-worth Indiana residents.

The Tax Cuts and Jobs Act (TCJA) doubled the federal exemption effective 2018, but this increase is scheduled to sunset after 2025. If Congress does not act, the exemption will revert to approximately $7 million (adjusted for inflation).

For Indiana residents with estates between $7 million and $15 million, this sunset creates a planning window: transfers made now under the higher exemption will not be clawed back, even if the exemption later decreases.

The absence of a state estate tax in Indiana simplifies the analysis — there is no gap between state and federal exemptions to navigate, no separate state return to file, and no risk of double taxation. However, this also means there is no state-level deduction to offset federal liability.

Federal planning tools — marital deductions, charitable deductions, and the unified credit — carry the full weight of estate tax mitigation. Use the Indiana estate tax calculator to model current and post-sunset scenarios, and review the Indiana probate cost calculator to understand full settlement costs.

Federal portability allows a surviving spouse to inherit the deceased spouse's unused estate tax exclusion (DSUE), effectively doubling the available federal exemption to $30 million for married couples. Electing portability requires filing Form 706 for the first-to-die spouse, even if no federal estate tax is owed — a step that is frequently overlooked when no tax appears to be due.

Because Indiana does not impose a state estate tax, there is no state-level portability concern. The federal election is the only one that matters, and it applies automatically to the surviving spouse's estate once made.

This is simpler than in estate-tax states, where the lack of state portability forces the use of bypass trusts to preserve both exemptions.

Despite this simplicity, portability has limitations. The DSUE amount is not indexed for inflation — it locks in at the value of the first spouse's unused exemption at the date of death.

If the surviving spouse remarries and the new spouse dies, the DSUE from the first spouse is lost. For Indiana families with significant wealth, bypass trusts may still be preferable to portability because they provide asset protection, generation-skipping benefits, and inflation-adjusted growth outside the surviving spouse's taxable estate.

Use the executor fee calculator and probate cost calculator to understand the full administration picture when comparing trust structures.

Without a state estate tax, Indiana residents focus planning efforts on the federal layer. The current $15 million exemption provides substantial shelter, but the scheduled TCJA sunset makes it prudent to accelerate planning.

Irrevocable trusts — including ILITs, SLATs, and QPRTs — remove assets from the taxable estate permanently. Once transferred, these assets and their future appreciation are outside the federal estate, regardless of future exemption changes.

Annual exclusion gifts of $19,000 per recipient (2025) remain the simplest estate reduction tool. Married couples can jointly gift $38,000 per recipient through gift-splitting.

Over a decade, a family gifting to four beneficiaries annually removes $1.44 million from the estate with no gift tax return required. Charitable deductions — whether through outright bequests, donor-advised funds, or charitable trusts — further reduce the taxable estate while supporting philanthropic goals.

GRATs and GRUTs (grantor retained unitrusts) transfer appreciation to beneficiaries at minimal transfer tax cost. For Indiana residents holding concentrated stock positions or rapidly appreciating assets, these vehicles are particularly efficient.

Family limited partnerships and LLCs may provide valuation discounts for gift and estate tax purposes, though the IRS scrutinizes these structures closely. Professional valuation and proper documentation are essential.

Model your federal exposure with the Indiana estate tax calculator, or find an estate planning attorney in Indiana for personalized guidance.