Estate Tax 2026: Exemption Limits, Rates & How to Avoid It
Estate Tax 2026: Exemption Limits, Rates & How to Avoid It The federal estate tax can take up to 40% of your assets above the exemption — but most Americans will never owe it. This guide explains 2026 exemption limits, rates, and legal strategies to minimize or avoid estate tax. What Is Estate Tax? A tax on the transfer of assets at death. The federal government taxes estates above a certain value. It's separate from: Inheritance tax: Paid by the heir (6 states only). Income tax: On earnings. Gift tax: On transfers during life (shares exemption with estate tax). Estate tax is calculated on the total value of everything you own: real estate, investments, retirement accounts, business interests, life insurance (if you own the policy). 2026 Federal Exemption Individual: $15,000,000 (per person). Married couple: $30,000,000 (with portability). Rate: 18-40% on amounts above exemption. Annual gift exclusion: $19,000 per recipient (2026). Lifetime gift/estate exemption: S...