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Do I Have a Taxable Estate?
Founder & CEO

Having a taxable estate means that, upon your death, the government will tax your estate because it has assets that are above certain thresholds the government sets. This typically applies to families with significant assets ($27.22 million per married couple in 2024, but the threshold is much lower in certain states). 

To find out if you have a taxable estate, you need to know the rules that apply to you at both the U.S. federal level and your state level (estate and/or inheritance taxes).

Once you know the rules, you can calculate your net worth, and you’ll start to see if you are likely to have a taxable estate. Remember to consider the impact of your life insurance—if you die, the death benefit can become part of your estate, too. If you suspect you will have a taxable estate, it is a great idea to work with an estate planning attorney.

Taxable estates under U.S. federal tax rules 

The threshold for taxation that the U.S. federal government sets is called the “basic exclusion amount.” You can find it on the IRS website, and it is updated every year for inflation. In 2024, the basic exclusion amount is $13.61 million per person, and a married couple can combine their individual exemptions, so it’s effectively $27.22 million per married couple in 2024.

The current estate tax exemptions are at historically high levels and are scheduled to decline on January 1, 2026. The Biden administration has proposed further reducing the exemptions to $3.5 million per person.

Basic Exclusion Amount for Federal Estate Taxes - Per Couple


Many people do not have a taxable estate under federal rules today, but that could easily change as the rules change, so it is good to keep an eye on what is happening with the basic exclusion amount.

What is the U.S. federal estate tax?

When you have a taxable estate at the federal level, you pay estate tax on the amount of the estate that is above the basic exclusion amount. Currently, the estate tax rate is at 40%, a low level compared to historical levels.

Federal Estate Tax % Rate in the U.S.


Taxable estates under state tax rules 

While the majority of states have no estate tax and no inheritance tax whatsoever, 17 states plus Washington, D.C., do. 

The thresholds in some states are quite low, particularly if you include life insurance. In Oregon and Massachusetts the exemptions are only $1 million dollars. Many people who may not consider themselves wealthy can end up with a taxable estate.

Here is a helpful map to see what rules apply to you if there’s a state estate tax or inheritance tax where you live.

Estate Tax (12)

Inheritance Tax (5)

Both (1)

  • CT
  • DC
  • HI
  • IL
  • MA
  • ME
  • MN
  • NY
  • OR
  • RI
  • VT
  • WA
  • IA
  • KY
  • NE
  • NJ
  • PA
  • MD

Source: https://taxfoundation.org/state-estate-tax-state-inheritance-tax-2020/

What should I do if I have a taxable estate?

When you have a taxable estate it is best to consider your options with qualified advisors. Here at AboveBoard we can help you explore insurance strategies, and we highly recommend doing so in conjunction with an estate planning attorney and (if you have one) your financial advisor.

If you do not yet have an estate planning attorney you love working with, we are happy to offer ideas of candidates you can interview. We also make referrals to financial advisors who embody the smart and ethical approach to their work that we apply to ours.

Wallis is the Founder & CEO of AboveBoard Financial, a company reinventing investment advice and insurance with revolutionary transparency and honesty. Wallis spent over 10 years at Goldman Sachs as an investment banker and hedge fund investor in financial institutions. She founded AboveBoard to cut through the BS and present important choices with clarity and compassion. Wallis lives in New York City with her husband and two young children.

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