Like many states, Delaware does not have an inheritance or estate tax. The First State also boasts the sixth-lowest property tax in the U.S., and has no gift tax, making it a relatively tax-friendly state. In this detailed guide of Delaware inheritance laws, we break down intestate succession, probate, what makes a will valid and more. If you’d like professional guidance on your estate planning, or just need help investing your inheritance, you can use SmartAsset’s advisor matching tool to find a financial advisor in your area.
Does Delaware Have an Inheritance Tax or Estate Tax?
There are no inheritance or estate taxes in Delaware, making it one of the 33 states nationwide that do not impose these taxes. However, the state repealed its estate tax – on Jan. 1, 2018 – so that means that if you inherited an estate prior to this date, you may still be subject to Delaware estate taxes.
Note that estate taxes and inheritance taxes work differently. Estate taxes are taken out of the deceased’s estate immediately after their passing, while inheritance taxes are imposed upon the deceased’s heirs after they have received their inheritance.
Making it even more tax-friendly, Delaware also does not have a gift tax. However, the federal gift tax is applied once an individual is gifted more than $16,000 in 2022 or $17,000 in 2023.
Other Necessary Tax Filings
- Estate taxes on inheritances prior to Jan. 1, 2018—Even though Delaware no longer levies an estate tax, if you inherited an estate of part of an estate prior to this date, you may be responsible for paying estate taxes. If an estate has a value of $5.49 million or more, then the estate may be subject to the Delaware estate tax.
- Inheritance tax from another state — Sure, Delaware does not levy an inheritance or estate tax, but if you inherit an estate from someone living in a state that does impart these taxes, you will be responsible for paying them.
- Federal estate tax—Additionally, the federal estate tax is applied in 2022 if an inherited estate is more than $12.06 million for individuals and $24.12 million for married couples. For 2023, this limit jumps to $12.92 million for individuals and $25.84 million for married couples.
To file any of these estate-based returns, you’ll need to apply for an employer identification number (EIN) with the IRS. You can do this online, by fax or via mail.
Dying With a Will in Delaware
No matter what state you’re in, dying with a valid will and last testament, or dying testate, gives you control over how your estate is distributed among heirs and to whom. On the other hand, if you die without a valid will or die intestate, your estate will be subject to your state’s inheritance laws and the distribution of your assets could be forced to pass through probate.
Each state has its own requirements for a testate will. In Delaware, those include being at least 18 years of age and of “sound and disposing mind and memory,” the will must be signed by both the testator and two witnesses, it must be in writing, and it must name a beneficiary. However, even if you have a valid will in Delaware, not all property is subject to it, such as property that is jointly owned with survivorship rights, which goes to the surviving owner.
In Delaware, an estate skips probate if it’s less than $30,000. That means your heirs might skip the lengthy probate process and claim their inheritance that much more quickly. However, the probate process can be a bit more involved than with other states. That’s because there are various legal probate forms and deadlines.
The executor of the estate must file the original will and a petition for probate with the Register of Wills in the county in which the deceased resided, file Inventory Form 600W with the Register of Wills, prepare a tax return for the deceased for the last year of his or her life, submit an overall picture of the estate to the Register of Wills and, finally, schedule and keep an appointment with the Register of Wills once the paperwork has been audited and thus, approved.
Delaware does not adhere to the Uniform Probate Code, a standardized set of probate procedures used by many states, which is why its probate process can be lengthy and involved.
Dying Without a Will in Delaware
Dying without a valid will and testament in Delaware your estate is subject to the state’s intestate succession laws. It also means that probate is likely, which is not ideal considering the state’s lengthy and involved process.
When you die intestate in Delaware, your assets will generally go to your closest living relatives.
But, as with many states, some assets do not pass through probate. These include property in a living trust, retirement accounts, life insurance policies, transfer-on-death accounts or payable-on-death accounts or jointly owned property.
Spouses in Delaware Inheritance Law
What your spouse is entitled to in intestate inheritance laws in Delaware, which is not a community property state, depends on whether you have any surviving children, parents or other descendants.
If you die with a surviving spouse and no children or surviving parents, your spouse inherits your entire estate.
If you pass with both a surviving spouse and children, your spouse gets the first $50,000 of your estate, plus ½ of the balance. They also get the right to use any intestate real estate for life. Your children inherit everything else.
If you die with a surviving spouse and parents, but no children, your spouse gets the first $50,000 of your estate, plus ½ of the balance. Your spouse also gets the right to use any intestate real estate for life. Your parents get the remainder.
Children in Delaware Inheritance Law
If you die intestate in Delaware, your children are entitled to part of your estate. But how much depends on whether you have a surviving spouse, how many other children the deceased has, plus if they are your children with your surviving spouse.
For example, if the deceased dies with a surviving spouse and children with that spouse, the spouse gets the first $50,000 of your estate, plus ½ of the balance. They also get the right to use any intestate real estate for life. The children inherit the remaining ½, split into equal shares.
If you die with a surviving spouse and with children with someone other than that spouse, the spouse gets ½ of your intestate assets, plus the right to use any intestate real estate for life. Your children get everything else.
If you die with children but no surviving spouse, your children inherit everything.
In Delaware, children are only eligible to receive part of your intestate assets if they are legally recognized children. That means they must be legally adopted, born within marriage, and those born outside of marriage if a marriage later occurred or paternity was established. Grandchildren are also eligible to receive a share if your child has passed before you.
|Intestate Succession: Spouses and Children|
|Inheritance Situation||Who Inherits Your Property|
|Spouse, but no children or living parents||– Entire estate to spouse|
|Spouse and children with that spouse||– Spouse inherits gets first $50,000, then ½ the estate, plus lifetime use of real estate. Children get the other ½.|
|Spouse and children with someone other that spouse||– spouse gets ½ of your intestate assets, plus the right to use any real estate for life. Children get everything else.|
|Spouse and parents||– Spouse inherits gets first $50,000, then ½ the estate, plus lifetime use of real estate. Parents get the other ½|
|Parents but no children or spouse||– Parents inherit everything|
Unmarried Individuals Without Children in Delaware Inheritance Law
Dying intestate and unmarried in Delaware means an estate will first pass along to any surviving children in equal shares. If there are no children, then the estate goes to the deceased’s parents, if they are living.
If the deceased has no children and their parents are no longer living, then their estate is to be passed down to his or her siblings in equal shares. If there are no siblings, then it goes to the next of kin. And as is the case in many other states, if the deceased dies without a spouse or any living relatives, their estate will escheat, in other words, go back to the state.
Keep in mind that these succession laws are only enacted in the case of an intestate estate. If the deceased has a valid will, it will take precedence over a state’s succession law
|Intestate Succession: Extended Family|
|Inheritance Situation||Who Inherits Your Property|
|Parents, but no spouse, children or siblings||– Entire estate to parents|
|Parents are deceased, but no spouse or children||– Estate split among siblings in equal shares|
|Parents or siblings||– Estate goes to next of kin|
Non-Probate Delaware Inheritances
There are some assets that do not fall under Delaware’s intestate succession laws, such as property in a living trust, life insurance proceeds, retirement account funds such as a Roth IRA, IRA or 401(k), jointly owned property, payable-on-death bank accounts and securities that are transfer-upon-death.
Other Features of Delaware Inheritance Law
A potential heir must outlive the decedent by 120 hours in order to be eligible for inheritance. Half relatives are treated the same as whole relatives. In Delaware, your heir’s immigration status also does not affect whether or not they stand to inherit part of your estate.
Resources for Estate Planning
Managing your own estate, or figuring out what to do with an inheritance, can get complicated. That’s why many people choose to work with a professional.
The SmartAsset financial advisor matching tool will pair you with as many as three nearby financial advisors equipped to handle your estate and inheritance planning needs. If you’re ready to work with a financial advisor in your area, get started now.
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