Use our Estate Tax Calculator to estimate inheritance taxes, plan assets, and understand liabilities quickly and accurately.
Estimate potential estate tax liability.
The Estate Tax Calculator helps you estimate federal estate tax liability on your estate. The federal estate tax, sometimes called the "death tax," applies to the transfer of property upon death when the total value exceeds the lifetime exemption amount. Understanding estate tax is essential for wealth preservation and ensuring your heirs receive the maximum inheritance possible.
With the Tax Cuts and Jobs Act (TCJA) provisions set to sunset on January 1, 2026, estate tax planning has become more critical than ever. The exemption is projected to drop from approximately $14 million to around $7 million per person—potentially exposing millions of estates to significant tax liability for the first time in years.
Gross Estate = Total value of all assets (real estate, investments, life insurance, retirement accounts, business interests)
Deductions = Debts, funeral expenses, charitable bequests, marital deduction for transfers to surviving spouse
Exemption = Federal lifetime exemption amount (varies by year; see table below)
Tax Rate = 18% to 40% progressive rate (40% on amounts over $1 million above exemption)
| Tax Year | Individual Exemption | Married Couple (with Portability) | Top Marginal Rate | Annual Gift Exclusion |
|---|---|---|---|---|
| 2024 | $13.61 million | $27.22 million | 40% | $18,000 |
| 2025 | $13.99 million | $27.98 million | 40% | $19,000 |
| 2026+ (Post-Sunset) | ~$7 million | ~$14 million | 40% | ~$19,000 (est.) |
Note: 2026 figures are projections based on TCJA sunset provisions. The exemption will revert to 2017 levels (~$5.49 million) adjusted for inflation. Amounts are indexed annually for inflation by the IRS.
Scenario: Single individual with $15 million estate in 2025
Same estate in 2026: With ~$7 million exemption, taxable amount = $8 million, potential tax = $3.2 million—a difference of $2.8 million!
Implement these strategies before the 2026 exemption sunset to minimize estate tax liability:
1. Maximize Lifetime Gifting: Use the annual gift exclusion ($18,000-$19,000 per recipient) to remove assets from your estate tax-free. Married couples can gift $36,000-$38,000 per recipient annually. Gifts reduce your taxable estate and transfer future appreciation to heirs.
2. Spousal Lifetime Access Trusts (SLATs): Transfer assets to an irrevocable trust for your spouse's benefit while using your current high exemption. Locks in the 2025 exemption amount before the 2026 decrease while maintaining indirect family access to funds.
3. Irrevocable Life Insurance Trusts (ILITs): Life insurance proceeds paid to your estate are taxable. An ILIT holds the policy outside your estate, providing tax-free death benefits to beneficiaries while potentially covering any estate tax liability.
4. Grantor Retained Annuity Trusts (GRATs): Transfer appreciating assets to a trust while retaining an annuity. Any growth above the IRS hurdle rate (7520 rate) passes to heirs gift-tax-free. Ideal for assets expected to appreciate significantly.
5. Charitable Remainder Trusts (CRTs): Donate assets to a CRT, receive income for life, reduce your taxable estate, and benefit your favorite charity. Provides current income tax deduction plus estate tax reduction.
6. Family Limited Partnerships (FLPs): Transfer business or investment assets to an FLP, then gift limited partnership interests at discounted values due to lack of marketability and control discounts (typically 20-35%).
7. Portability Election: If your spouse dies first, file IRS Form 706 within 9 months to claim their unused exemption. This "portability" allows surviving spouses to use up to $27.98 million (2025) in combined exemptions.
Mistake: Assuming estate tax doesn't apply to you. Reality: With the 2026 exemption dropping to ~$7 million, many more estates will be taxable. Include life insurance proceeds in your calculation—a $2 million policy plus a $6 million estate creates a taxable estate.
Mistake: Not claiming portability after a spouse's death. Fix: File IRS Form 706 within 9 months (with 6-month extension available) even if no estate tax is owed. This preserves the deceased spouse's unused exemption for the survivor.
Mistake: Waiting until 2026 to implement estate planning strategies. Reality: Once the exemption drops, you cannot retroactively use the higher amount. Irrevocable trusts and large gifts should be completed by December 31, 2025.
Mistake: Ignoring state estate and inheritance taxes. Reality: 18 states plus Washington DC have separate estate or inheritance taxes. States like Massachusetts and Oregon have exemptions as low as $1 million. Combined federal and state rates can exceed 50%.
Mistake: Failing to update beneficiary designations. Fix: Retirement accounts and life insurance pass outside your will. Ensure beneficiaries are current and consider trust beneficiaries for estate tax planning and asset protection.
| State | Tax Type | Exemption Amount | Top Rate |
|---|---|---|---|
| Massachusetts | Estate Tax | $1 million | 16% |
| Oregon | Estate Tax | $1 million | 16% |
| Washington | Estate Tax | $2.193 million | 20% |
| New York | Estate Tax | $6.94 million | 16% |
| Maryland | Both | $5 million (estate) | 16%/10% |
| Pennsylvania | Inheritance Tax | N/A (based on heir) | 4.5%-15% |
Note: This is not a complete list. Consult your state's tax authority for current rules. Some states have "cliff" provisions where exceeding the exemption by even $1 can tax the entire estate.
Authoritative Sources & References: Estate tax calculations are based on IRS Form 706 instructions and Internal Revenue Code Sections 2001-2210. Exemption amounts are published annually in IRS Revenue Procedures. The 2026 sunset provisions are codified in the Tax Cuts and Jobs Act of 2017 (P.L. 115-97), Section 11061. State tax information is sourced from respective state departments of revenue. For personalized estate planning advice, consult a qualified estate planning attorney, CPA, or financial advisor. Calculator updated January 2026.
The 2026 federal estate tax exemption is projected to drop significantly to approximately $7 million per individual ($14 million for married couples) when the Tax Cuts and Jobs Act provisions sunset on January 1, 2026. This represents a dramatic decrease from the 2025 exemption of $13.99 million. For estates valued between $7-14 million, this change could result in new estate tax liability of 40% on amounts exceeding the exemption. Estate planning strategies like lifetime gifting, irrevocable trusts, and charitable giving should be implemented before the sunset date to lock in the higher exemption amounts.
The federal estate tax uses a progressive rate structure with rates ranging from 18% to 40%. The top marginal rate of 40% applies to taxable estates exceeding $1 million over the exemption threshold. The calculation formula is: Estate Tax = (Gross Estate Value - Deductions - Exemption Amount) × Applicable Tax Rate. In 2025, estates under $13.99 million (single) or $27.98 million (married with portability) pay zero federal estate tax. For 2026, when the exemption drops to ~$7 million, estates valued at $10 million could face $1.2 million in federal estate taxes. Additionally, 18 states plus Washington DC impose separate estate or inheritance taxes with exemptions as low as $1 million.
Effective estate tax reduction strategies include: (1) Annual exclusion gifting—give up to $18,000 per recipient ($36,000 for married couples) tax-free annually, removing assets and future appreciation from your estate; (2) Irrevocable Life Insurance Trusts (ILITs)—exclude life insurance proceeds from your taxable estate; (3) Grantor Retained Annuity Trusts (GRATs)—transfer appreciating assets to heirs with minimal gift tax; (4) Qualified Personal Residence Trusts (QPRTs)—transfer your home at reduced gift tax value; (5) Charitable Remainder Trusts (CRTs)—receive income during life while benefiting charity and reducing estate; (6) Spousal Lifetime Access Trusts (SLATs)—lock in the high exemption before 2026 while maintaining family access; (7) Dynasty Trusts—transfer wealth across multiple generations while avoiding estate tax at each level. Consult an estate planning attorney to implement these strategies before the 2026 exemption sunset.