Supporters of the One Big Beautiful Bill Act gave wealthy clients a great gift for 2026: Federal estate exemptions will actually increase next year, instead of returning to an inflation-adjusted version of the old, pre-2017 amounts.
One concern for financial professionals and their clients is that the District of Columbia and most of the 16 states that still have estate taxes or inheritance taxes have offer much smaller exemptions.
For a look at those states' individual estate or inheritance tax exemptions, along with the range of "death tax" rates, see the gallery accompanying this article.
What it means: Wealth planning and estate planning professionals still have work to do.
The federal picture: Today, the federal estate tax exemption is $13.99 million for an individual and $27.98 million for a couple.
Before OBBBA passed, the exemptions were on track to fall to about $7 million for an individual and $14 million for a couple.
Now, the exemptions are about to rise to $15 million for an individual in 2026 and $30 million for a couple.
The state picture: Iowa has eliminated its inheritance tax since we last looked at the subject.
Washington is increasing its estate exemption, but it's also increasing what the estates subject to the tax pay.
The states that still have inheritance taxes free spouses and children ages 21 and younger from the taxes, but, for the heirs who do have to pay the taxes, such as cousins and friends, the exemptions tend to be meager: Two states have no exemptions at all for heirs with the wrong kinds of relationships with the deceased.
For most states with estate taxes, the individual exemptions range from $1 million to $7.2 million. Just one has an individual exemption equal to the current federal exemption.
Methods: We based the data here on information from the Tax Foundation, the American College of Estate and Trust Counsel and TaxRep's U.S. state inheritance and estate tax guide along with sources based in each state.
We provide links to government death tax rule summaries for most states but a link to a law firm site for one state (Nebraska) with an official summary site that was hard to find.
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