Also called: basic exclusion amount
A tax on the transfer of a deceased person's assets above an exclusion amount. The federal exclusion (15 million dollars per person in 2026) is indexed for inflation; states tax estates at much lower levels.
Assets left to a surviving spouse who is a US citizen pass free of federal estate tax, and a surviving spouse can claim the deceased spouse's unused federal exclusion. Retirement accounts count toward the estate at full value even though heirs will also owe income tax on pre-tax balances.
The federal basic exclusion is fifteen million dollars per person in 2026 (One Big Beautiful Bill Act, 2025), made permanent and indexed for inflation each year. Because it grows with inflation, a federal estate tax is far less likely decades from now than the current figure suggests — though a future Congress could change the law.
RetIQ computes the federal estate tax, any state estate or inheritance tax, and the income tax your heirs owe in the Estate & Net-to-Heirs panel on the Legacy tab. State death taxes follow your state of domicile at plan end — a modeled move (Decide → Relocation) switches them. A primary residence entered on the Home / Real Estate card (Inputs → Real Estate) is included in the estate.