The federal estate tax exemption for 2026 is $15 million per person. That figure is the amount a person can transfer to heirs free of federal estate tax. Estates valued below that threshold owe no federal estate tax at all. Estates above it pay tax only on the amount that exceeds the exemption, at rates up to 40%.
The taxable estate includes everything someone owned at death: a primary home, vacation property, investment and brokerage accounts, retirement accounts, business interests, life insurance proceeds paid to the estate, and personal property. The IRS adds it all together before applying the exemption.
For married couples, the federal exemption can reach roughly $30 million combined. That happens through portability, a rule that allows a surviving spouse to claim any unused exemption.
Key Takeaways
- The 2026 federal estate tax exemption is $15 million per person.
- Portability is not automatic. A surviving spouse must file Form 706 to claim a deceased spouse's unused exemption.
- Couples can give $38,000 per year per recipient in 2026 without impacting the lifetime exemption at all.
- 12 states have their own estate taxes.
- Elayne helps families manage the administrative steps that follow a death, including locating accounts and coordinating filings across institutions.
What the Federal Estate Tax Is and How the Exemption Works
The federal estate tax applies to the transfer of wealth from a deceased person's estate to their heirs. The IRS calculates the tax against the total taxable estate, which includes real estate, investment accounts, retirement assets, business interests, and other property.
The exemption is the amount an estate can pass to heirs free of federal tax. For 2026, that threshold is $15 million per individual. Estates valued below that amount owe no federal estate tax at all.
For married couples, the exemption can be doubled through portability, allowing a combined exemption of $30 million.
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What the $15 Million Threshold Means in Practice
The 2026 federal estate tax exemption of $15 million per individual means most estates will owe no federal estate tax at all. For married couples using portability, the combined exemption reaches $30 million, covering the vast majority of high-net-worth households.
How the Exemption Works
Any estate valued below the applicable exemption passes to heirs free of federal estate tax. Estates above the threshold pay tax only on the amount exceeding it, at rates up to 40%.
- Portability allows a surviving spouse to claim any unused exemption from the deceased spouse, but an estate tax return must be filed to elect it, even if no tax is owed.
- Gifts made during life count against the same lifetime exemption, so large prior gifts reduce what remains available at death.
- State-level estate taxes apply separately and at lower thresholds, meaning an estate can owe state tax even when no federal tax is due.
How Portability Works for Married Couples
Portability lets a surviving spouse claim the unused portion of their deceased spouse's federal estate tax exemption. When the first spouse dies, any exemption they didn't use can transfer to the survivor, effectively doubling the amount the surviving spouse's estate can forward free of federal tax.
For 2026, with the exemption rising to $15 million per person, a married couple can potentially exempt $30 million from federal estate tax through portability.
How the Election Works
Portability isn't automatic. The executor of the first spouse's estate must file a federal estate tax return (Form 706) to elect portability, even if no estate tax is owed at that time. Missing this filing means the unused exemption is lost.
A few details worth keeping in mind:
- The portability election must be made on a timely filed Form 706, generally due nine months after the first spouse's death, with a six-month extension available.
- The IRS has allowed a simplified late portability election procedure for estates that weren't otherwise required to file, currently available up to five years after the first spouse's death.
- The surviving spouse's estate uses the deceased spouse's unused exemption (DSUE) amount, added on top of their own exemption at the time of their death.
- Remarriage can affect this: if the surviving spouse remarries and outlives a second spouse, the DSUE from the first spouse is replaced by the second spouse's DSUE.
The Annual Gift Tax Exclusion and Its Connection to the Lifetime Exemption
In 2026, the annual gift tax exclusion is $19,000 per recipient. This figure is separate from the lifetime exemption but connects to it in a meaningful way.
When gifts stay at or below $19,000 per recipient per year, they pass free of gift tax without impacting the lifetime exemption at all. Gifts above that threshold require filing IRS Form 709 and draw down the available lifetime exemption dollar for dollar.
For married couples, gift splitting allows each spouse to contribute up to $19,000 to the same recipient, effectively raising the per-recipient annual ceiling to $38,000 without any exemption impact.
A few practical points worth keeping in mind:
- Annual exclusion gifts do not reduce the $15 million lifetime exemption, so consistent gifting strategies can move wealth out of a taxable estate without any exemption cost.
- Once the lifetime exemption is used up through taxable gifts, additional gifts above the annual exclusion face gift tax at the current rate.
- Gifts that exceed the annual exclusion in a given year are not taxed immediately; they are tracked cumulatively against the lifetime exemption until that exemption is exhausted.
- Tuition and medical payments made directly to the institution or provider are excluded entirely and do not count against either the annual exclusion or the lifetime exemption.
State Estate Taxes
Twelve states and the District of Columbia have their own estate taxes, each with exemption thresholds below the federal level. For many families, an estate can owe state estate tax even when no federal estate tax is due.
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Key State Exemptions at a Glance
Several states have their own estate taxes, each with different exemption thresholds, rate structures, and filing rules.
Examples
| State | 2026 Exemption | Top Rate | Notable Feature |
|---|---|---|---|
| Massachusetts | $2 million | 16% | No portability; each spouse files separately |
| New York | $7.16 million (est.) | 16% | Cliff tax applies if estate exceeds 105% of exemption |
| New Jersey | No estate tax | N/A | Repealed in 2018; inheritance tax still applies |
| Illinois | $4 million | 16% | No portability between spouses |
| Minnesota | $3 million | 16% | Includes some out-of-state property |
| Washington | $2.193 million | 20% | Highest top rate in the country |
| Maryland | $5 million | 16% | One of two states with both estate and inheritance tax |
| Maine | $6.8 million | 12% | Indexed for inflation annually |
How Elayne Helps Families Organize and Settle an Estate
Elayne helps families manage the administrative work that follows a death, including locating accounts and assets, notifying financial institutions, and coordinating survivor benefits.
An estate near or above the federal threshold often involves multiple financial institutions, outstanding benefit claims, and time-sensitive filings across jurisdictions. Elayne organizes that process into a clear sequence.
Finding What Exists
Elayne's Verified Asset Search goes beyond public-record databases to surface accounts, policies, and assets families may not be aware of. The search includes document analysis: Elayne scans tax returns, bank statements, and financial records to identify which financial institutions held accounts, what income sources existed, and where assets may be held.
Stopping Recurring Charges Early
Streaming services, gym memberships, software subscriptions, and other recurring charges often continue billing for weeks or months after a death. Elayne scans financial records to surface these charges, manages cancellation communications directly with each provider, and monitors subsequent statements to confirm the charges have stopped. Each confirmation is logged for estate accounting.
Identifying Survivor Benefits
Social Security survivor benefits, pension distributions, veterans' benefits, and union benefits each carry their own eligibility rules, notification requirements, and deadlines. Elayne identifies which benefits apply to the estate and surfaces the requirements and deadlines attached to each one.
Working Alongside Professionals
Elayne is built to work alongside attorneys, accountants, and financial advisors, not in place of them. When legal or tax help is needed, the overview Elayne builds provides estate professionals with an organized starting point. In addition, Elayne provides a shared workspace where authorized family members and advisors can access documents, track progress, and work through steps together.
FAQs
Does the $15 million exemption apply to state estate taxes?
No. State estate taxes operate on separate exemption schedules. Massachusetts and Oregon, for example, tax estates above $2 million. Families with estates that fall under the federal threshold may still owe state estate tax depending on where the person who died was domiciled.
Do gifts made before 2026 count against the exemption?
Yes. Lifetime taxable gifts reduce the remaining exemption available at death. However, under current IRS rules, gifts made under a higher exemption are not subject to clawback if the exemption later decreases, provided the gifts were reported on Form 709 at the time they were made.
What is the federal estate tax exemption for 2026?
The federal estate tax exemption for 2026 is $15 million per individual, made permanent by the One Big Beautiful Bill Act signed in 2025. Married couples can exempt up to $30 million combined through portability, provided the executor files Form 706 after the first spouse's death to elect it.
Should I still do estate planning if my estate is under the $15 million 2026 federal exemption?
Yes. Twelve states plus the District of Columbia have their own estate taxes at much lower thresholds. Massachusetts taxes estates above $2 million, Washington state above $2.193 million, and Minnesota above $3 million. A family whose estate falls well under the federal exemption can still owe considerable state estate tax depending on where the person who died was domiciled.
How does portability work for a married couple under the 2026 estate tax exemption?
Portability lets a surviving spouse claim the deceased spouse's unused federal exemption, potentially exempting close to $30 million from federal estate tax in 2026. The election is not automatic: the executor must file Form 706 within nine months of the first spouse's death, with a six-month extension available, even when no tax is owed at that time.
*Disclaimer: This article is for informational purposes only and does not provide legal, medical, financial, or tax advice. Please consult with a licensed professional to address your specific situation.
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