If you are a Missouri resident and are expecting to inherit assets, it’s important to understand whether the state imposes an estate tax. Estate taxes can have a significant impact on an individual’s inheritance. Continue reading for more information and consult with a skilled St. Louis estate lawyer today for more information.
What is an Estate Tax?
An estate tax is a tax levied on the net value of a deceased person’s assets before they can be distributed to heirs. The tax is paid by the estate itself, not usually by individual beneficiaries. Estate taxes are based on the overall value of the estate, which is commonly made up of homes, land, investment accounts, retirement accounts, vehicles, businesses, and valuable personal property.
Estate taxes are paid by the estate before distribution occurs, whereas inheritance taxes are paid by the beneficiary receiving inherited assets. Federal law allows estates below a certain value threshold to avoid estate taxes, meaning that only the amount exceeding the threshold would be potentially taxable.
Does MO Have an Estate Tax?
No, Missouri does not currently impose a state estate tax. It also does not have an inheritance tax. This means that beneficiaries generally do not owe Missouri state taxes simply for receiving money or property from the estate of a loved one. This applies to a wide range of inherited assets, including:
- Cash
- Real estate
- Investment accounts
- Personal belongings
Missouri previously imposed an estate tax tied to a federal tax credit system, but it was eliminated in 2005 after changes to federal law rendered it obsolete.
Do You Ever Have to Pay Taxes on Inherited Assets in MO?
Just because there is no state estate tax does not exempt an estate from all financial or legal obligations. Missouri residents may still be subject to the federal estate tax if the total value of the estate exceeds the federal exemption threshold, which is $15,000,000 for deaths occurring in 2026. The estate is also still responsible for settling probate expenses, paying valid creditor claims, and addressing any outstanding income taxes.
It’s also important to note that while the act of inheriting is not taxed, specific assets can create future tax consequences. For example, selling inherited property may trigger capital gains taxes if the value has increased, and withdrawals from inherited retirement accounts are typically treated as taxable income. In addition, any future income generated by an inherited asset is subject to standard taxation.
For more information and legal assistance navigating estate law, reach out to a skilled attorney at the Stobie Family Law Group today.
