Tax year 2026  ·  Reviewed October 7, 2026  ·  By Nazim Lokhandwala

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The short version. Most families will not owe federal estate tax in 2026, because the exclusion is $15,000,000 per person. Estate planning still matters for who gets what, who makes decisions if you cannot, and how the people you leave behind are taxed.

2026 federal numbers

Item2026
Federal estate and gift tax exclusion$15,000,000 per person
Generation-skipping transfer exemption$15,000,000
Annual gift exclusion per recipient$19,000
Annual gift exclusion to a non-citizen spouse$194,000
Estate tax return (Form 706) filing threshold$15,000,000

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A married couple can use portability: when the first spouse dies, the executor can elect on Form 706 to pass the unused exclusion to the survivor. The election requires filing a timely return, even when no tax is due. [3]

How basis works at death

  • Inherited property. Its tax basis generally becomes its value on the date of death (the "step-up"). Selling right after inheriting usually produces little taxable gain. [4]
  • Gifts during life. The recipient generally keeps the giver's original basis (carryover), so gains can still be taxed later. [4]
  • Retirement accounts. Traditional IRA and 401(k) money does not get a step-up. It is taxed as income to the person who receives it. See our beneficiary guide. [5]

State taxes where Nazim works

StateWhat applies
VirginiaNo estate tax and no inheritance tax today.
New JerseyNo estate tax for deaths since 2018, but an inheritance tax remains. It depends on the beneficiary's relationship to the person who died. Spouses and children are generally exempt (Class A). More distant relatives and others can owe rates of 11% to 16%.
District of ColumbiaEstate tax with an exclusion of $4,988,400 for 2026 deaths, much lower than the federal amount. Rates run from 11.2% to 16%. A DC return can be required even when no federal return is.

Other states have their own rules. Check the state where the person lived and where property is located. [6, 7, 8]

Probate, trusts, and who gets what

A revocable living trust is a trust you can change or end during your life. The Consumer Financial Protection Bureau explains that its main purpose is to avoid probate, which can be public, slow, and costly. A trust does nothing for assets that are not retitled into it. [9] Retirement accounts and similar assets pass to the named beneficiary, so keeping those forms current is as important as the will. [5]

The documents that matter

  • A will, or a revocable living trust, or both
  • A durable power of attorney for finances
  • An advance medical directive (living will) and a health care power of attorney
  • Current beneficiary designations on every retirement account and policy
  • A list of accounts, passwords, advisors, and where documents are kept

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Questions to bring to an estate attorney

  • Is my estate near any federal or state tax threshold, now or as my assets grow?
  • Should assets be titled in a trust, and which ones?
  • Who should be my executor, agent, and guardian, and who is the backup?
  • Do my beneficiary forms match what my will says?

Plan a conversation

Frequently asked questions

What is the 2026 federal estate tax exclusion?

$15,000,000 per person, with a $15,000,000 generation-skipping transfer exemption.

What is the 2026 annual gift exclusion?

$19,000 per recipient.

What is portability?

When the first spouse dies, the executor can elect on Form 706 to pass the unused exclusion to the survivor. It requires filing a timely return, even when no tax is due.

General education, not legal, tax, or investment advice. Estate law varies by state. Work with a licensed attorney in your state for documents and tax planning.

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