What is the estate tax exemption for 2026?

$13.61 million per individual, $27.22 million for married couples. This means estates under these amounts owe zero federal estate tax. Less than 0.1% of estates exceed the threshold.

What is the estate tax rate?

The federal estate tax rate is a flat 40% on taxable estate value above the exemption. Some states also levy their own estate or inheritance taxes with lower exemptions.

Is life insurance part of your estate?

Yes, if you own the policy. Life insurance proceeds are included in your gross estate for tax purposes. An irrevocable life insurance trust (ILIT) can remove the policy from your estate.

Will the estate tax exemption decrease?

The current high exemption is scheduled to sunset after 2025, potentially dropping to approximately $7 million per individual. Congress may act to extend it, but planning for the lower amount is prudent.

Estate Planning Calculator

Free estate planning calculator. Estimate federal estate tax, see the impact of the estate tax exemption, and plan your legacy.

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Things to Know

Essential concepts for understanding your results

Essential Documents

What are the five essential estate planning documents?

1) Will: distributes assets, names guardians for minor children. 2) Revocable living trust: avoids probate (which is public and costs 3-7% of estate value). 3) Financial power of attorney: authorizes someone to manage finances if incapacitated. 4) Healthcare power of attorney: designates medical decision-maker. 5) Living will/advance directive: specifies end-of-life care wishes. Without these, your state decides who inherits, who makes medical decisions, and the process costs $5,000-15,000+ in court fees.

Beneficiary Designations

Why do beneficiary designations override your will?

Retirement accounts (401(k), IRA), life insurance, and bank accounts with POD/TOD pass directly to named beneficiaries — regardless of what your will says. An ex-spouse listed as 401(k) beneficiary receives the money even if your will says otherwise and even if you remarried. Review and update all beneficiary designations after: marriage, divorce, birth of a child, death of a named beneficiary, and every 2-3 years. This is the single most common estate planning mistake — and the easiest to prevent.

Probate Avoidance

How do you avoid probate?

Probate is the court-supervised process of distributing a deceased person's assets — it is public, slow (6-18 months), and expensive (3-7% of estate value). Avoidance strategies: revocable living trust (assets titled in the trust skip probate), beneficiary designations on all accounts, joint ownership with right of survivorship (property passes automatically), and transfer-on-death deeds (available in 29 states for real estate). A $500,000 estate avoiding probate saves $15,000-35,000 in fees and months of delay.

Estate Planning Calculator: Protect Your Legacy and Minimize Taxes

An estate planning calculator estimates the federal and state estate taxes your heirs may owe and identifies strategies to minimize the tax burden. In 2026, the federal estate tax exemption is approximately $13.99 million per person ($27.98 million for married couples) — meaning only estates above this threshold pay the 40% federal estate tax. However, the exemption is set to be cut roughly in half (~$7 million) in 2026 if Congress does not act to extend it.

Enter your total estate value, marital status, and state above. The calculator shows your estimated federal and state estate tax exposure and recommends key planning strategies.

Estate Tax Thresholds: Federal and State

Jurisdiction	Exemption Amount	Top Tax Rate
Federal (2026, current law)	~$13.99M ($27.98M couple)	40%
Federal (if exemption sunsets)	~$7M ($14M couple)	40%
Oregon	$1,000,000	16%
Massachusetts	$2,000,000	16%
New York	$6,940,000 (cliff)	16%
Washington State	$2,193,000	20%
Minnesota	$3,000,000	16%
Connecticut	$13,990,000	12%
12 states + DC have estate taxes	$1M-$13.99M	12-20%

The sunset risk: The current high exemption ($13.99M) was set by the 2017 Tax Cuts and Jobs Act and is scheduled to revert to approximately $7 million (inflation-adjusted) on January 1, 2026 (or 2027 depending on Congressional action). For estates between $7M and $14M: this change could create a $2.8 million tax bill (40% of $7M) that does not exist under current law. Estate planning in 2025-2026 should account for this uncertainty.

Essential Estate Planning Documents

Will: Directs asset distribution, names guardians for minor children, names executor. Without a will: state intestacy laws determine who inherits (often not what you would have chosen). Only 33% of Americans have a will (Gallup 2024). Cost: $300-$1,000 for a simple will, $1,500-$5,000 for complex estates.

Revocable living trust: Avoids probate (public, slow, expensive), maintains privacy, and allows seamless asset management if you become incapacitated. Assets in a trust transfer immediately upon death — no court involvement. Cost: $1,500-$5,000. Essential for: homeowners (avoids probate on real estate), anyone with assets above $100,000, and parents of minor children.

Beneficiary designations: 401(k)s, IRAs, life insurance, and POD bank accounts pass directly to named beneficiaries — overriding your will. Review these annually. Outdated beneficiaries (ex-spouse still named on a 401k) cause more estate disputes than any other planning failure.

Power of attorney + healthcare directive: Designates who makes financial and medical decisions if you are incapacitated. Without these: your family must petition a court for guardianship ($5,000-$15,000 and months of delay) during a medical emergency.

Frequently Asked Questions

Do I need to worry about estate tax?

Federal: only if your estate exceeds $13.99M (single) or $27.98M (couple) — approximately 0.1% of estates. State: if you live in one of the 12 states + DC with estate taxes (thresholds as low as $1M in Oregon). The sunset risk: if the exemption drops to ~$7M, estates between $7M-$14M become taxable. For estates under $5M: estate tax is not a concern, but probate avoidance, beneficiary planning, and incapacity planning are still essential.

What is the step-up in basis?

When you inherit an asset, your cost basis "steps up" to the value at the date of death — eliminating all unrealized capital gains. Parent bought stock at $10, worth $100 at death: your basis is $100. If you sell at $100: zero capital gains tax. This is one of the most powerful tax benefits in the code and a key reason to hold appreciated assets until death rather than gifting during life (gifts carry over the original basis).

Do I need a trust or just a will?

A will alone is sufficient for: small estates (under $100K), simple family situations, and states with streamlined probate. A trust is recommended for: homeowners (real estate must go through probate without a trust), estates above $100K, blended families, anyone wanting privacy (wills are public record after probate), and parents of minor children (trust controls how/when children receive assets).

What happens if I die without a will?

State intestacy laws determine who inherits — typically: spouse gets 50-100% (varies by state), then children, then parents, then siblings. Unmarried partners receive nothing. Friends and charities receive nothing. The court appoints an executor (possibly someone you would not have chosen). Minor children's guardians are decided by a judge, not you. The process takes 6-18 months and costs $5,000-$20,000+ in legal fees. A simple will ($300-$1,000) avoids all of this.

How do I reduce estate taxes?

For estates near or above the exemption: annual gifting ($19,000/person/year exclusion, unlimited), irrevocable life insurance trusts (ILIT — removes life insurance from the estate), charitable giving (reduces the taxable estate), spousal lifetime access trusts (SLATs — uses the current high exemption before potential sunset), and dynasty trusts. Consult an estate planning attorney — these strategies require precise execution and the stakes are high (40% tax on amounts above the exemption).

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