Money: The Death Tax Lives

Congress tried to kill the estate tax, but many states are giving it new life

The relative no one wants to leave money to is Uncle Sam. That's why it's worth paying attention to recent changes in the federal estate tax. Now $1 million can pass to heirs tax-free, up from $675,000 in 2001, and the amount will gradually increase to $3.5 million in 2009. But that federal exemption may not protect your estate from a steep state tax bill when you die.

Although the federal estate tax is set to disappear in 2010, many states aren't as eager to bury their own death taxes. In the past, most states imposed an estate tax that was...

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