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Michigan Estate Tax and Inheritance Tax: What Families Should Check
Guides3 min read

Michigan Estate Tax and Inheritance Tax: What Families Should Check

Michigan estate tax and inheritance tax guide. Learn when old Michigan inheritance tax rules may matter, when federal estate tax may apply, and what records to keep.

By Settled Editorial

Most recent Michigan probate cases do not start with a Michigan inheritance-tax filing. The older state inheritance tax usually matters only for older deaths or after-discovered assets from an older estate.

Tax review still matters. The estate may need final income tax work, estate income tax review, property tax review, transfer tax review, or federal estate-tax advice.

For the guide version, see Michigan estate tax and inheritance tax. If inherited property may be sold, pair it with Michigan step-up in basis.

Michigan Inheritance Tax Is an Older-Death Issue

Michigan Treasury says Michigan inheritance tax remains in effect only for people who inherited from someone who died on or before September 30, 1993.

That date matters when a family finds an old asset years later. Treasury says a letter should be sent within 90 days of discovering an after-discovered asset, with asset details and date-of-death value information.

For a recent death, the old inheritance-tax rule usually does not drive the probate plan.

Federal Estate Tax

Federal estate tax is separate from Michigan probate. For 2026 deaths, the IRS estate tax page lists a filing threshold of $15,000,000.

A federal filing can also matter for portability or other federal choices. High-value estates may need a tax professional early because valuation, deadlines, deductions, and elections can change the filing plan.

Income Tax After Death

The decedent may need a final individual income tax return. An estate may also need a separate tax return if it earns income after death.

Post-death income can include:

  • Interest
  • Dividends
  • Rent
  • Business income
  • Sale income from estate assets

Keep account statements and closing documents so a tax preparer can separate pre-death income from post-death estate income.

Real Estate Transfer Tax

Michigan real estate transfers can require transfer tax review. MCL 207.526 lists exemptions from state real estate transfer tax, but a deed may still need county recording review, transfer tax documentation, and local filing steps.

Do not assume an exemption applies without checking the deed, transfer facts, and county register of deeds instructions.

Records to Keep

Keep:

  • Date-of-death account statements
  • Real estate valuations or appraisals
  • Business ownership records
  • Sale closing statements
  • Estate bank statements
  • Funeral and administration expense receipts
  • Distribution records
  • IRS and Michigan Treasury letters

Clear records help with tax filings and beneficiary questions.

When to Ask a Tax Professional

Get tax help when an estate has a high value, business assets, rental property, farm property, real estate sales, securities, out-of-state property, or any after-discovered asset from a pre-October 1993 death.

For costs outside tax, compare Michigan probate costs and court fees. For real estate and title steps, use Transfer Property After Death in Michigan and Michigan transfer-on-death deed alternatives. For planning before death, compare Michigan estate planning basics and Michigan revocable living trust.

Sources:

This article provides general Michigan tax information. Ask a tax professional about filing duties, valuation, elections, deductions, and deadlines for a specific estate.

Information current as of May 16, 2026

This content is for informational purposes only and does not constitute legal advice. Probate laws and procedures in Michigan can change. Consult with a qualified attorney for advice specific to your situation. Full disclaimer.

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