Magazine: Don't die in Indiana

INDIANAPOLIS (WISH) - Forbes magazine has a warning for you: don't die in Indiana in 2013.  

Dying as a resident of the Hoosier state will hit you in your wallet.

"Indiana still has an inheritance tax,"  says Paul Kraft, an attorney and estate planner with Frank & Kraft Attorneys At Law in Indianapolis. 

Indiana is not alone, twenty other state have similar laws.

Forbes put together a map on their website diagramming the states that have inheritance or estate taxes. The states in color have taxes that make it harder for your heirs to hold on to the green you've accumulated over the years.

Spouses pay no tax on inheritance.  Those most closely related to you, considered class A,  get the biggest exemption.  Children and daughters and sons-in-law, get a $250,000 dollar exemption in Indiana. Kraft says that's changing, thanks to a law passed last March by state legislators.

"The main thing that it did was phase out the Indiana inheritance tax over the next ten years," says Kraft.

Every year from now until 2022, it will cost your heirs less inheritance tax when you die. And in 2022, the tax is gone.

You pay no Federal Inheritance tax on any estate valued at less than $5.25 Million. 

State or Federal there are ways to ease the burden of estate tax.  "There's an unlimited exemption for wealth left to charities.  501c3 type organizations," says Kraft. 

Or you can give your money away before you die.  To anyone. "There is a limit that this year went up to $14,000 dollars, where you can give away $14,000 dollars per person per year," says Kraft.

There has been talk of perhaps speeding up the time table of phasing out Indiana's inheritance tax.

But with last year's law now in place, it's not likely that will happen.