Tools

Estate tax exposure check

Estimates 2026 federal estate tax on your assets and life insurance, and shows how much of it comes from policies you own.

Runs entirely in your browser: nothing you enter is sent or stored by this site. Results are estimates for planning, not a quote or advice.

How to use it

  1. Enter the value of everything you own: home, investments, business interests and retirement accounts.
  2. Enter the death benefit of life insurance you own or control. Policies count in your estate if you own them or hold incidents of ownership.
  3. Enter debts and expenses.
  4. Choose a marital status. For a married person leaving part to others, enter the amount going to the spouse.
  5. Enter any lifetime exemption you have already used on taxable gifts, and any unused exemption inherited from a late spouse.
  6. Choose your state to see whether it has its own estate or inheritance tax. Several states tax estates far smaller than the federal exemption, so a $0 federal result does not settle the question.

How the math works

  1. Gross estate = assets + life insurance.
  2. Marital deduction = gross estate minus debts if you leave everything to a U.S.-citizen spouse, the amount you enter if you leave part to the spouse, or zero otherwise.
  3. Taxable estate = gross estate − debts − marital deduction, never below zero.
  4. Exemption = $15,000,000 − gifts already used + the inherited amount you enter.
  5. Tax = 40% of the taxable estate above the exemption.

The tool runs the calculation twice, with and without the insurance. If the policies add tax, it reports how much and points to an irrevocable life insurance trust and the the three-year rule for transferring a policy.

Hypothetical example: $14,000,000 of assets, $3,000,000 of life insurance you own, $500,000 of debts, single, no prior gifts. The gross estate is $17,000,000 and the taxable estate $16,500,000. That is $1,500,000 over the exemption, so the tool shows about $600,000 of tax. Without the policy the taxable estate would be $13,500,000, under the exemption, so the policy accounts for the whole amount.

What it assumes

  • The figures are for 2026, from the IRS page on estate and gift tax: a basic exclusion of $15,000,000 per person, set by Public Law 119-21 (the 2025 tax law known as the One Big Beautiful Bill Act), and a top rate of 40%. The annual gift exclusion is $19,000, though the tool has no field for gifts within it, which do not use up your exemption.
  • The tool applies one person's exemption. A late spouse's unused amount counts only if you type it into the portability box.
  • The tool adds no state tax to the result.

Where it stops being right

  • It is a simplified estimate. The tool says real returns involve graduated rates, deductions for charity and administration costs, and valuation rules.
  • Leaving everything to a spouse defers the tax to the second death, which this single-estate view does not follow. Filing an estate tax return to elect portability keeps the unused exemption.
  • Many states tax estates well below the federal level, or tax inheritances. See state estate and inheritance taxes and life insurance.
  • Tax law changes. Check the current IRS figures before relying on any number.
  • Moving a policy into a trust involves ownership, timing and gift rules. life insurance and the federal estate tax and an estate attorney are the places to start. Policies often fund estate liquidity: paying taxes and debts without a fire sale needs, which the tool does not size.

The How much life insurance do I need? sizes coverage for a family's income needs, which is a different question from estate tax.

Last reviewed October 4, 2026

Related guides

Life insurance and the federal estate tax Death benefits are included in your taxable estate if you own the policy or it pays your estate (IRC §2042). How the 2026 $15 million exemption applies. Irrevocable life insurance trusts (ILITs) An ILIT owns your policy so the death benefit stays out of your taxable estate. How it works, Crummey gifts, the three-year rule, costs and who needs one. The three-year rule for transferring a policy Give away a life insurance policy and die within three years, and IRC §2035 pulls the death benefit back into your taxable estate. How to plan around it. State estate and inheritance taxes and life insurance Which states tax estates or inheritances in 2026, with thresholds, sources and as-of dates, and how life insurance you own can push an estate over a state line. Estate liquidity: paying taxes and debts without a fire sale Why estates rich in property but short on cash are forced to sell, what bills come due after a death, and how life insurance and other tools supply the cash. Gift tax and life insurance premiums When paying premiums or transferring a policy is a gift, how the 2026 $19,000 annual exclusion and $15 million exemption apply, and when to file Form 709.

Terms used here

Estate tax A federal tax on the transfer of a deceased person's assets above an exemption amount, with a top rate of 40%; some states levy their own. Federal estate tax exemption The amount a person can pass at death or give during life before federal estate and gift tax applies: $15 million per person for 2026, per the IRS. Irrevocable life insurance trust (ILIT) A trust that owns life insurance and can't be changed or revoked by its creator, keeping the death benefit out of the insured's taxable estate. Gift tax annual exclusion The amount you can give any one person each year without filing a gift tax return or using lifetime exemption: $19,000 per recipient in 2026, per the IRS. Estate Everything a person owns at death, from property and accounts to some life insurance, which is settled and distributed to heirs and creditors.

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