We often think about the best places to live, but we don’t spend any time considering the best places to, you know, die. Of course, the idea of going somewhere to die is an unpleasant one. For us, it conjures up Nicolas Cage in the movie “Leaving Las Vegas,”' where he plays a man who has lost his job and his family and, in desperation, moves to Las Vegas to drink himself to death. That is NOT what we mean by having a good death. What we mean by having a good death is being in a state with good palliative medical care and low - or NO - estate and inheritance taxes. In compiling this list of bests and worsts, we reviewed data from PolicyGenius, which put the most weight on a person's ability to pass away at home, the availability of palliative medical care, and the ease of probate. We also added our own impressions of estate and inheritance taxes.
The Worst According to PolicyGenius: Florida
According to PolicyGenius, some states offer you a better deal on the way out than others. Where you die has major implications for how well your family is taken care of in the aftermath of your passing. Policy Genius ranked the 50 states and Washington D.C. from the best to worst places to die in if you want to stay rich. They considered factors like funeral costs, burial options, medical providers, estate taxes, and probate shortcuts.
So which state is the worst of the worst? Florida, of course. According to Policy Genius, “Florida is the worst place to die in 2022. This may be surprising given its popularity with retirees. One-fifth of Florida residents are over age 65, and 9.5% of Florida residents are over 75 years old; no other state has an over-70 population as big, percentage-wise. However, people who retire in the Sunshine State should know Florida ranked 43rd for at-home deaths. It also has the fewest Medicare providers per capita of any state, and it ranks 36th when it comes to the availability of palliative care.”
Policy Genius doesn’t put too much value on Florida’s lack of an estate or inheritance tax. This probably would not matter to most people. However, if you are already very rich, then you could do much worse than in Florida, where you might have a painful death surrounded by Florida Men, but at least your descendants would pay less in taxes.
The Best According to PolicyGenius: Vermont
Conversely, Policy Genius concludes that Vermont was the best place to die in 2022. Cheers to the Green Mountain State. The website says Vermont “ranked fifth for the density of funeral homes and related services, including cemeteries and crematoriums, and third for green burial options. However, the average funeral costs are more expensive than 86% of the country, which makes sense given Vermont’s higher than average cost of living.” This means that if you don’t have a highly-valuable estate, you’ll have a better death in Vermont. If your estate is worth more than $5 million dollars, though, any amount above that rate will be taxed at 16%, which is not so great.
Most Expensive Funerals According to PolicyGenius: New York
PolicyGenius says that the average funeral cost was $8,112 in 2020. For people who don’t have a lot of money, this is a significant cost. Funeral costs range from $6,000 on the low end up to $15,000 on the high end. PolicyGenius says there’s nowhere more expensive to die than New York if you factor in funeral costs: “If you can make it here, you may not want to die here. New York lands among the worst places to die because of the state’s expensive funeral costs and the low percentage of people who pass away at home. Funerals cost more here than in 94% of the country, and New York ranks 41st for deaths at home.”
FastWill’s Best Place to Die: Ohio!
Taking into account both taxes and medical care, FastWill has crowned Ohio as the best place to die if you want good end-of-life care and no taxes. According to Policy Genius, “Ohio has more affordable funeral costs than 70% of the country (and the lowest funeral costs of our best places to die). Compared to the rest of the country, not as many people die at home in Ohio, though; the state lands in the bottom (42nd) for at-home deaths. About 11,700 people a year spend their last days in a hospital. Ohio scored well in palliative care (coming in 6th) and has its own advisory council dedicated to palliative care. [5] The council consults with and advises the Department of Health to establish and implement best practices surrounding palliative care.”
And in the all-important death tax score, the Buckeye state does not have an estate tax or an inheritance task. O-H-I-O!
FastWill’s Worst Place to Die: Maryland
If you have lots of money and only care about avoiding taxes, then you want to avoid Maryland at all costs. Maryland is the only state that has both an estate tax rate and a state inheritance tax rate. Estate taxes are paid from your estate before your assets can be distributed to your heirs. That means states with higher tax rates lower the overall value of your estate. Inheritance taxes are paid by those who receive a bequest from your estate. Those taxes are based on how much is distributed to your heirs. Maryland’s higher exemption rate of $5,000,000 means that most people in the state will avoid the estate tax.
Which states have the highest estate tax rates? Hawaii and Washington, topping out at 20 percent. However, estates are exempt if they are valued at below a certain threshold. Hawaii’s threshold is $5,490,000, meaning that your estate won’t be taxed at all if it is valued at less than that amount. This means most people won’t owe any inheritance tax.
According to the Center on Budget and Policy Priorities, only 17 states and the District of Columbia have an estate or inheritance tax.
Bad Places to Die: States with Low Estate Tax Exemption Levels
States that are worse to die in if you want to hold on to your money include Massachusetts and Oregon. Both states have the lowest estate tax exemption levels at just $1 million. So, in Massachusetts, you must file an estate tax return if the estate value is over $1 million. The tax will apply to the entire value, not just the amounts that are above $1 million. Because of the way the state structured its estate tax, any estate over the value of $40,000 is paying a lot of tax. In Oregon, the estate tax rate ranges from 10% to 16% and applies to all estates above $1 million.
If you have a highly-valued estate, then Connecticut might be a decent place to die if you want your family to remain rich. Connecticut’s estate tax exemption will increase in 2023 to $12.92 million. That means the state has the highest exemption rate in the country and that the first $12.92 million of your estate won’t owe an estate tax.
Tips for Handling Estate and Inheritance Taxes
Most people won’t have to pay estate or inheritance taxes, but there are some tips for alleviating the tax burden:
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You can fund a 539 or custodial account to pay for your kids’ education. You can also put money aside to fund the education of your grandchildren. These accounts will reduce your estate’s overall taxable value.
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You can also give some of your money away as a gift. The annual gift tax exclusion for 2023 was $17,000. Under federal law, you can give up to $17,000 to as many people as you want to without incurring tax liabilities on the gift.
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Transfer your home into a trust. A “qualified personal residence trust” or QPRT transfers the ownership of your home into a trust. You can still live in the home without paying rent. When the trust term ends, your beneficiaries will take over the property.
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Charitable giving will decrease the value of your estate.
Be sure you plan out your estate carefully by looking at all state requirements and tax regulations. No one wants to think about their death while they’re still alive, but it pays to make arrangements while you can.
