estate planning + business entities + real estate + asset protection + small-business

Will I have to pay estate taxes when I die?

Probably not. For persons dying in 2018, estimates show that 99% of all estates will not owe any federal estate tax.

The vast majority of Americans will owe zero federal estate tax when they die. A person dying in 2018 has the ability to shelter up to $11.18 million ($5.49 million in 2017) without owing any federal estate tax. Now, in reality, it’s not as simple as just looking at your bank statements to see if you are close to $11.18 million. Many assets have specific rules on how to value them, and certain assets you might not normally think about have to be included in the calculation such as some life insurance death benefits and other assets. But, even after these complicated calculations, the vast majority of Americans still won’t owe any federal estate tax.

Congress can (and frequently does) change the law to raise or lower the 2018 11.18 million figure. It’s important for you to keep up to date on the exemption amount on a yearly basis; if the law changes and or your financial situation brings you closer to these amounts, you should seek legal advice to see if you need to do any tax planning. In 2018 you may not need any tax planning, but if Congress drops the taxable amount significantly, that may affect more Americans. As of time of writing this article, the 2018 11.18 million figure is set to expire and revert back to an inflation adjusted $5 million on 31 December 2025 unless Congress changes the law between now and then.