Estate Tax Exemption at $13.61M as Planning Costs Rise
With the federal estate tax exemption at $13.61 million per person in 2026, most Americans owe no federal estate tax. But 12 states plus DC impose their own estate or inheritance tax, and probate costs can consume 2-7% of your estate. Proper planning with trusts and gifting can save hundreds of thousands.
Ready to run the numbers?
Why: Estate planning protects your family and minimizes taxes. Without a plan, probate can consume 2-7% of your estate and take months or years. State estate taxes apply in 13 jurisdictions with lower exemptions.
How: We calculate federal estate tax (40% above exemption), state estate/inheritance tax for 13 jurisdictions, probate costs by state, attorney fees by plan complexity, and trust administration costs. We compare total cost with vs without proper planning.
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📊 Federal Estate Tax by Estate Value
🍩 Estate Costs Breakdown
📈 Gifting Strategy Tax Savings Over Time
🗽 State Estate Tax Comparison
Estate Planning Summary
Potential savings from proper planning: $57,000. Federal estate tax: $0. State estate tax: $0. Probate costs: $80,000.
For educational and informational purposes only. Verify with a qualified professional.
Estate planning protects your assets and minimizes taxes. The federal exemption is $13.61M single ($27.22M married) in 2026. Twelve states plus DC impose estate or inheritance tax. Probate costs 2-7% of estate value. A trust-based plan typically costs $1,500-$5,000 but can save tens or hundreds of thousands in taxes and probate.
Sources: IRS, Tax Foundation, AARP, NOLO.
Key Takeaways
- • Federal exemption $13.61M single / $27.22M married in 2026—most estates owe no federal tax
- • State estate tax applies in 12 states + DC with lower exemptions ($1M-$6M)
- • Trusts avoid probate (saving 2-7%) and enable advanced tax planning
- • Annual gifting ($18K/person in 2026) reduces taxable estate over time
Did You Know?
How Estate Planning Costs Work
Federal Estate Tax
40% on amounts above $13.61M (single) or $27.22M (married). Portability allows surviving spouses to use unused exemption.
State Taxes
CT, DC, HI, IL, ME, MA, MD, MN, NY, OR, RI, VT, WA have estate or inheritance tax. Exemptions range from ~$1M to $6M.
Probate vs Trust
Probate: court-supervised, 2-7% of estate, public. Trust: avoids probate, private, setup cost $1,500-$5,000+.
Expert Tips
Estate Plan Complexity Comparison
| Plan Type | Attorney Cost | Best For |
|---|---|---|
| Simple Will | $300-$1,000 | Small estates, no complex assets |
| Revocable Trust | $1,500-$3,500 | Avoid probate, privacy |
| Complex Plan | $3,500-$10,000+ | Business, multiple states, tax planning |
Frequently Asked Questions
What is the federal estate tax exemption in 2026?
The federal estate tax exemption is $13.61 million per person ($27.22 million for married couples) in 2026. Estates below this threshold owe no federal estate tax. The exemption is indexed for inflation.
Which states have estate or inheritance tax?
Twelve states plus DC impose estate or inheritance tax: Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, Washington, and DC. Exemptions and rates vary by state.
How much does probate cost?
Probate typically costs 2-7% of the estate value depending on state. Attorney fees, court costs, and executor fees add up. A $500,000 estate might incur $15,000-$35,000 in probate costs. Trusts avoid probate.
What do estate planning attorneys charge?
Simple wills cost $300-$1,000. Trust-based estate plans run $1,500-$5,000+ depending on complexity. Business succession planning adds significantly. Many attorneys offer flat-fee packages for basic plans.
What is the annual gift tax exclusion?
In 2026, you can gift up to $18,000 per person per year without using your lifetime exemption. Married couples can gift $36,000 per person. Strategic gifting reduces taxable estate over time.
How much can a trust save in estate costs?
Trusts avoid probate (saving 2-7% of estate value), provide privacy, and enable tax planning. Trust administration typically costs 0.5-1.5% of assets annually. For estates over $1M, savings often exceed setup costs.
Key Statistics
Official Data Sources
⚠️ Disclaimer: This calculator is for educational purposes only. Estate tax laws vary by state and change over time. Consult a qualified estate planning attorney and tax professional for advice tailored to your situation. Not legal or tax advice.
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