Zombie Tax – Update

Good news on the “Zombie Tax” front. This summer, the Legislature passed a new law changing the Hawaii death tax laws. Honestly, I haven’t read the law in its entirety (watch this space for a more in-depth update), but basically it changed the amount that can be passed free of Hawaii state estate tax from a fixed, $3.5 million, to a figure that tracks the Federal exemption (which is now $5.12 million, set to return to $1 million on January 1, 2013). So while the Zombie Tax is still (un)dead, at least it is a little easier to figure out, and plan for – you will either have a taxable estate (under both Federal and State law) or you won’t.

Unless you are in a civil union, of course – in which case you can’t claim the unlimited Federal marital deduction, but can claim an unlimited marital deduction for the purpose of calculating the Hawaii estate tax. Hopefully they’ll fix that soon, too – I heard that DOMA was just declared unconstitutional by the Second Circuit, looks like it’s headed to SCOTUS.