Does Minnesota have a separate estate tax from the federal government?

Yes. Minnesota imposes its own estate tax with a $3 million exemption, independent of the federal estate tax system. As of 2026, the federal exclusion is $15 million per person under the OBBBA, meaning many estates that owe no federal estate tax may still have a Minnesota estate tax liability.

Does Minnesota allow portability of the estate tax exemption between spouses?

No. Unlike the federal estate tax, Minnesota does not allow a surviving spouse to use any unused exemption from a deceased spouse. Each spouse must independently use their own $3 million exemption or it may be lost. A credit shelter trust is a common strategy to preserve both exemptions for married couples.

What are Minnesota’s estate tax rates?

Minnesota uses a progressive rate structure ranging from 13% to 16% on the value of a taxable estate above the $3 million exemption. The tax is not a "cliff" tax — it applies only to the amount above the exemption, not to the entire value of the estate.

Does Minnesota have an inheritance tax?

No. Minnesota does not impose an inheritance tax. Beneficiaries who receive assets from an estate are not taxed on those amounts at the state level.

Does Minnesota have a gift tax?

No. Minnesota does not impose a gift tax. This creates a planning opportunity — assets transferred during your lifetime are typically not subject to Minnesota estate tax.

What is a credit shelter trust and why does it matter for Minnesota residents?

A credit shelter trust, also called a bypass trust or family trust, is a trust structure that captures the first spouse's Minnesota estate tax exemption at death rather than allowing all assets to pass outright to the surviving spouse. Because Minnesota does not allow portability, this type of trust may allow married couples to use both spouses' $3 million exemptions, potentially reducing the overall Minnesota estate tax exposure.

What changed with Minnesota’s dynasty trust law in 2025?

In May 2025, Minnesota amended its Rule Against Perpetuities to allow trusts to remain in existence for up to 500 years, up from the prior 90-year limit. This change enables families to create long-duration irrevocable trusts — known as dynasty trusts — that may preserve wealth across multiple generations while potentially minimizing estate and generation-skipping transfer (GST) taxes.

Are there any special deductions available for business owners or farmers?

Yes. Minnesota allows a qualified small business and farm property subtraction of up to $2 million, which may be combined with the $3 million exclusion for a total of up to $5 million in deductions for qualifying assets. Families with business or agricultural holdings should evaluate whether their assets meet the applicable criteria with the help of a qualified estate planning professional. [10]

OBBBA Archives

Estate Planning Article

Minnesota Estate Planning: Strategies for Your Legacy

Minnesota residents face a $3 million estate tax with no spousal portability. Discover trust strategies, lifetime gifting, and tools designed to preserve your legacy.

Tax Planning Webinar

Smart Savings for the Next Generation: Understanding 529 Plans and Trump Accounts

Learn how 529 plans and Trump Accounts each play a distinct role in funding your child’s education and long-term retirement — and how to get the most from both.

Financial Planning Article

Employer Contributions to Trump Accounts Explained

New guidance clarifies how employers can contribute to Trump Accounts, including limits, tax treatment, and required reporting.

Retirement Article

Is Social Security Taxed in 2026? What Retirees Need To Know About New Rules

Learn when Social Security benefits may be taxable in 2026, income thresholds, state rules, and how new deductions could reduce what retirees owe.

Family & Health Article

Trump Accounts Explained: Rules, Benefits, and How to Get Started

Discover how Trump accounts can help you save for your child’s future and whether the new saving opportunity might be right for you.

Tax Planning Webinar

New Tax Laws & Year-End Strategies

An overview of new tax laws and practical year‑end strategies, including charitable giving, Roth conversions, portfolio taxes, and estate planning considerations.

A couple discussing estate and gift taxes

Tax Planning Article

Estate and Gift Tax: Essential Considerations

Unlock strategies to navigate estate and gift taxes effectively, help minimize tax burdens, and outline specific financial objectives.

Tax Planning Article

Alternative Minimum Tax After OBBBA

The OBBBA made changes to the Alternative Minimum Tax System. Learn about the potential impact on your tax situation.

Financial Planning Article

How the One Big Beautiful Bill Act Changes Student Loans and Forgiveness

OBBBA reshapes student loans: New repayment plans, borrowing limits, and key deadlines explained.

Tax Planning Article

OBBBA’s Auto Loan Interest Deduction: A Tax Break That Could Cost You More

Explore the OBBBA auto loan interest deduction, who qualifies, and why it may not be worth the savings.

A couple planning their giving and tax strategy

Tax Planning Article

How Much Can You Give in 2025 Without Paying Gift Tax?

In 2025, you can give up to $19K tax-free per person. Learn how gift tax exclusion works and what it means for estate and tax planning.

Tax Planning Webinar

OBBBA and Your Tax Strategies

This webinar breaks down the new tax law, highlighting planning strategies around rates, deductions, charitable giving, estate planning, and new opportunities for individuals and families.

Tax Planning Article

Charitable Giving Changes are Coming in 2026

The One Big Beautiful Bill Act changes charitable deductions in 2026 – here’s what it means for your giving strategy.

About Mercer Advisors

We exist so you don’t have to worry about money. For more than 40 years, we’ve taken the sophisticated, time-tested approach that many ultra-high net worth individuals use to help manage their financial lives and made it accessible to more families.

Want to learn more about Mercer Advisors?

Let’s Talk

Core Solutions

Specialty Solutions

Our Team

Engaging Us

Our Locations

Sharing Knowledge

Explore by Topic

Trending

Explore by Format

Latest

OBBBA

Minnesota Estate Planning: Strategies for Your Legacy

Smart Savings for the Next Generation: Understanding 529 Plans and Trump Accounts

Employer Contributions to Trump Accounts Explained

Is Social Security Taxed in 2026? What Retirees Need To Know About New Rules