Total Estate Tax
$0
Estate Details
Include real estate, investments, life insurance, business interests
Marital deduction (assets to spouse - unlimited exemption)
Deceased spouse's unused exemption (DSUE) - doubles federal exemption
Planning Strategies
Select strategies to simulate potential tax savings:
Lifetime Gifting
$18k/year per recipient
Tax-free transfersIrrevocable Trust
Remove assets from estate
Full exclusionLife Insurance Trust
Exclude policy proceeds
100% excludedGRAT
Transfer appreciation
Minimize gift tax2024 Federal Estate Tax Rates
Progressive rates apply to taxable amounts above the $13.61M exemption.
| Over | Up To | Rate |
|---|---|---|
| $0 | $10,000 | 18% |
| $10,000 | $20,000 | 20% |
| $20,000 | $40,000 | 22% |
| $40,000 | $60,000 | 24% |
| $60,000 | $80,000 | 26% |
| $80,000 | $100,000 | 28% |
| $100,000 | $150,000 | 30% |
| $150,000 | $250,000 | 32% |
| $250,000 | $500,000 | 34% |
| $500,000 | $750,000 | 37% |
| $750,000+ | — | 40% |
Understanding Estate Taxes
What Is the Federal Estate Tax?
The federal estate tax is a tax on the transfer of property at death. For 2024, only estates exceeding $13.61 million per individual ($27.22M for married couples with portability) owe federal estate tax. The top rate is 40% on amounts above the exemption.
State Estate vs. Inheritance Taxes
12 states + DC impose estate taxes (paid by the estate before distribution), while 6 states impose inheritance taxes (paid by beneficiaries). Maryland has both. State exemptions are often much lower than federal:
- Massachusetts & Oregon: $1 million exemption
- New York: ~$6.94 million (2024)
- Washington: ~$2.2 million
Key Deductions
- Marital Deduction: Unlimited for assets to U.S. citizen spouse
- Charitable Deduction: 100% for qualified charities
- Debts & Expenses: Funeral, administrative costs, mortgages
⚠️ Sunset Provision Warning
The current $13.61M exemption expires December 31, 2025. Without Congressional action, it will revert to ~$7 million (adjusted for inflation) in 2026. Consider accelerated gifting strategies.
Planning Strategies
Lifetime Gifting: Gift up to $18,000 per recipient per year (2024) without using your lifetime exemption. Married couples can combine for $36,000 per recipient.
Irrevocable Trusts: Remove assets from your taxable estate while maintaining control over distribution to heirs.
ILITs: Life insurance proceeds are included in your estate. An Irrevocable Life Insurance Trust removes these proceeds from taxation.
FAQ
What is the federal estate tax exemption for 2024?
The federal estate tax exemption is $13.61 million per individual for 2024. Married couples can potentially combine exemptions to $27.22 million through portability.
Which states have estate or inheritance taxes?
Estate tax states: CT, HI, IL, MA, ME, MN, NY, OR, RI, VT, WA, DC. Inheritance tax states: IA, KY, MD, NE, NJ, PA. Maryland has both types.
Do beneficiaries pay tax on inheritance?
Federal: No tax on inheritance received. States: Only in inheritance tax states (IA, KY, MD, NE, NJ, PA). Spouses are typically exempt. Beneficiaries also get a "step-up in basis" on appreciated assets.
Estate Tax Summary
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