Many veterans worry that their family will lose a large share of the estate to taxes. The IRS lists a basic exclusion amount of $15,000,000 for people who die in 2026. State taxes are a separate question, because some states have their own estate tax or inheritance tax with much lower limits. This guide explains, in plain English, how the federal estate tax works in 2026 and how to find out whether your state has its own tax.
Key Takeaways
- The IRS lists the 2026 basic exclusion amount as $15,000,000, up from $13,990,000 for 2025.
- The IRS says the estate tax "is a tax on your right to transfer property at your death."
- Property passing to a surviving spouse is eligible for the marital deduction, according to the IRS.
- A surviving spouse can keep a deceased spouse's unused exclusion only if an estate tax return is filed to elect it.
- Some states have their own taxes. Washington has an estate tax, and Pennsylvania has an inheritance tax, each with its own rules.
- A tax professional or estate attorney can confirm what applies to your family.
Table of Contents
- What the Federal Estate Tax Is
- The 2026 Federal Numbers
- Deductions and the Spouse Rules
- State Estate and Inheritance Taxes
- How to Check Whether Your Family May Owe
- Ask the Navigator
- Frequently Asked Questions
- Sources
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What the Federal Estate Tax Is
The IRS defines it simply: "The Estate Tax is a tax on your right to transfer property at your death." It is figured on the value of what a person owns when they die, after certain deductions.
What counts in the estate
The IRS says the gross estate "consists of an accounting of everything you own or have certain interests in at the date of death." That includes "cash and securities, real estate, insurance, trusts, annuities, business interests and other assets." The IRS says fair market value is used, "not necessarily what you paid for them."
Trusts do not automatically remove property
The IRS lists trusts among the items in the gross estate. The Florida Bar adds that with a revocable living trust, your "retained interest and power over the trust assets will cause the trust to be included in your taxable estate at death." A living trust is useful for other reasons, but by itself it is not an estate tax shelter.
The 2026 Federal Numbers
These figures come straight from IRS.gov.
The basic exclusion amount
The IRS "What's new — Estate and gift tax" page lists the basic exclusion amount for 2026 as $15,000,000. The IRS says this figure comes from the Working Families Tax Cuts legislation, signed into law on July 4, 2025 as Public Law 119-21, which amended section 2010(c)(3) of the Internal Revenue Code.
Recent years for comparison
The IRS estate tax page lists these filing thresholds by year of death:
- 2024: $13,610,000
- 2025: $13,990,000
- 2026: $15,000,000
When a return is required
The IRS says "a filing is required if the gross estate of the decedent, increased by the decedent's adjusted taxable gifts and specific gift tax exemption, is valued at more than the filing threshold for the year of the decedent's death." The return is Form 706. The IRS says it is due nine months after death, and a six-month extension is available.
The annual gift exclusion
Lifetime gifts tie into the same system. The IRS lists the annual gift exclusion for 2026 as $19,000.
Deductions and the Spouse Rules
Even a large estate may owe little or no federal estate tax because of deductions.
The marital deduction
The IRS says "all property that is included in the gross estate and passes to the surviving spouse is eligible for the marital deduction."
Other deductions
The IRS also lists a charitable deduction for property left to qualifying charities, plus deductions for mortgages, debts, and administration expenses.
Portability for a surviving spouse
When the first spouse dies, any unused exclusion can pass to the surviving spouse. The IRS calls this the "deceased spousal unused exclusion (DSUE) amount." There is a catch. The IRS says "an estate tax return also must be filed if the estate elects to transfer any deceased spousal unused exclusion (DSUE) amount to a surviving spouse." That means some families file Form 706 even when no tax is due. A tax professional can explain whether this makes sense for your family.
State Estate and Inheritance Taxes
Federal law is only part of the picture. Some states have their own estate tax, inheritance tax, or both. Their limits can be far lower than the federal amount. Here are two examples from official state sites. These are not the only states with such taxes.
Washington: a state estate tax
The Washington Department of Revenue lists an estate tax exclusion amount of $3,076,000 for deaths from January 1, 2026 through June 30, 2026. For deaths from July 1, 2025 through December 31, 2025, it lists $3,000,000. Rates on the taxable amount are set out in the Department's tables. Washington residents can check the Department of Revenue site for the figure that applies to a specific date of death.
Pennsylvania: an inheritance tax
An inheritance tax works differently. The rate depends on who receives the property. The Pennsylvania Department of Revenue lists rates of:
- 0 percent on transfers to a surviving spouse, or to a parent from a child aged 21 or younger
- 4.5 percent on transfers to direct descendants and lineal heirs
- 12 percent on transfers to siblings
- 15 percent on transfers to other heirs, except charitable organizations, exempt institutions and government entities exempt from tax
The Department says property owned jointly between spouses is exempt. It also lists an exemption for the personal property of members of the armed forces, a reserve component or the National Guard who die as a result of an injury or illness received while on active duty, for deaths after September 6, 2022. Tax becomes delinquent nine months after death, and a 5 percent discount is allowed if it is paid within three months.
Your state
To find out whether your state has an estate or inheritance tax, check your state's department of revenue or taxation website. A local estate attorney or tax professional can also confirm the current rules.
How to Check Whether Your Family May Owe
These steps help organize the facts. They are not tax advice.
- Add up the gross estate. Use the IRS list: cash, securities, real estate, insurance, trusts, annuities, business interests and other assets, at fair market value.
- Compare to the federal figure. For a 2026 death, the IRS filing threshold is $15,000,000.
- Note what goes to a spouse. Property passing to a surviving spouse is eligible for the marital deduction.
- Ask about portability. If you are married, ask a tax professional whether filing Form 706 to elect DSUE makes sense.
- Check your state. Look up your state's estate or inheritance tax on its official revenue site.
- Check where heirs and property are. Ask a professional whether property in another state raises other questions.
- Keep records. Store statements and deeds with your will or trust so your executor or trustee can find them.
Many veteran families also review VA life insurance and beneficiary designations at the same time.
Ask the Navigator
Have a question about your family's estate plan? Ask AVOY Veteran Navigator AI™ at avoyvet.com, and take the free Veteran Legacy Checklist to gather the documents a tax professional or estate attorney will ask for.
Frequently Asked Questions
What is the federal estate tax exemption for 2026?
The IRS lists the 2026 basic exclusion amount as $15,000,000.
Does my living trust help avoid estate tax?
A revocable living trust alone does not. The IRS includes trusts in the gross estate, and the Florida Bar says a revocable trust is included in your taxable estate.
Does my spouse owe estate tax on what I leave them?
The IRS says property passing to a surviving spouse is eligible for the marital deduction.
When is the federal estate tax return due?
The IRS says Form 706 is due nine months after death, with a six-month extension available.
Does my state have an estate or inheritance tax?
Some states do. Washington has an estate tax and Pennsylvania has an inheritance tax. Check your state's official revenue website for current rules.
Sources
- What's new — Estate and gift tax — IRS.gov
- Estate tax — IRS.gov
- Frequently asked questions on estate taxes — IRS.gov
- Estate Tax Tables — Washington Department of Revenue
- Inheritance Tax — Pennsylvania Department of Revenue
- The Revocable Trust in Florida — The Florida Bar
Educational information only — not legal, tax, financial, or medical advice, and not affiliated with the U.S. Department of Veterans Affairs. Estate and probate rules vary by state; an estate attorney in your state can confirm what applies. For VA benefits help, contact a VA-accredited VSO (often free), claims agent, or attorney.
