Estate Tax Calculator: Exemption & Legacy Model
Calculate your federal and state estate tax liability with 2026 exemption limits. Plan for marital deductions, charitable giving, and inheritance optimization.
Federal Estate Tax Brackets (2026)
Progressive Rate Structure
- $0 - $10,000:18% marginal rate
- $10,001 - $20,000:20% marginal rate
- $40,001 - $60,000:24% marginal rate
- $500,001 - $1,000,000:37-39% marginal rate
- Over $1,000,000:40% marginal rate (maximum)
Estate tax applies only to the amount exceeding your exemption. Rates are progressive, starting at 18% and reaching 40% on amounts over $1 million above exemption.
State Estate Tax Landscape
Lowest Exemption States
- Oregon:$1,000,000 exemption, up to 16% rate
- Massachusetts:$2,000,000 exemption, up to 16% rate
- Rhode Island:$1,774,583 exemption, up to 16% rate
- Washington:$2,193,000 exemption, up to 20% rate (highest)
Some states tax estates far below the federal threshold:
Higher Exemption States
- New York:$6,940,000 exemption (with cliff: lose entire exemption if estate exceeds 105%)
- Maine:$6,800,000 exemption, up to 12% rate
- Connecticut:Matches federal exemption
Some states offer more generous exemptions:
Strategic Planning Techniques
Pre-Death Wealth Transfer
- Annual Exclusion Gifts:$18,000/recipient (2024), unlimited recipients, no lifetime exemption used
- Direct Tuition/Medical:Pay directly to institutionโunlimited, no gift tax
- 529 Plan Superfunding:Contribute 5 years' annual exclusion at once ($90K)
- Irrevocable Trusts:Assets leave your estate but you may retain some benefits
Reducing your taxable estate through lifetime transfers:
Liquidity Solutions
- ILIT (Irrevocable Life Insurance Trust):Death benefit pays tax; not included in estate
- Section 6166:Installment payments over 14 years for closely-held business interests
- Graegin Loan:Estate borrows from family members; interest deductible
Ensuring heirs can pay taxes without selling assets:
Estate Tax Calculator FAQ
What is the federal estate tax exemption in 2026?
The 2026 federal estate tax exemption is projected at approximately $7 million per individual ($14 million for married couples using portability). This is a significant drop from the 2025 exemption of $13.61 million due to the sunset of the Tax Cuts and Jobs Act provisions.
How does the unlimited marital deduction work?
Assets passing to a surviving U.S. citizen spouse are completely exempt from estate tax, regardless of amount. Additionally, "portability" allows the surviving spouse to use any unused portion of the deceased spouse's exemption (DSUE), effectively doubling the exemption for married couples.
What is the difference between estate tax and inheritance tax?
Estate tax is paid by the estate before distribution to heirs (federal and some states). Inheritance tax is paid by the recipient after receiving assets (only in 6 states: IA, KY, MD, NE, NJ, PA). Some states have both. The federal government only has estate tax, not inheritance tax.
How can I reduce my taxable estate before death?
Key strategies include: annual gift exclusion ($18K+ per recipient, unlimited recipients), charitable giving (reduces estate dollar-for-dollar), irrevocable trusts (removes assets from estate), paying tuition/medical bills directly (unlimited, doesn't count against exemption), and qualified personal residence trusts (QPRTs).
What happens if my estate doesn't have enough cash to pay the tax?
If liquid assets are insufficient, heirs may need to sell property, business interests, or other assets to pay the taxโoften at distressed prices ("fire sale"). Solutions include life insurance in an ILIT (proceeds pay tax without being taxed themselves), installment payments over 10+ years for closely-held businesses, or pre-death liquidity planning.
Which states have their own estate or inheritance taxes?
Twelve states and DC have estate taxes with exemptions ranging from $1M (Oregon, Massachusetts) to matching federal levels. Six states have inheritance taxes. Maryland and New Jersey have both. State taxes are in addition to federal, though state taxes paid are deductible from federal taxable estate.