Definition
A federal tax on the transfer of a person's property at death, owed only on estates above the basic exclusion of $15,000,000 for 2026.
What it means
The federal estate tax applies to the taxable estate of someone who has died, after debts, expenses, charitable gifts and transfers to a surviving spouse who is a U.S. citizen. For people who die in 2026, the basic exclusion amount is $15,000,000, set by a 2025 law that made the higher exemption permanent and indexed it for inflation after 2026. The top rate on the amount above the exclusion is 40%. A surviving spouse can generally use the deceased spouse's unused exclusion, called portability, if an estate tax return is filed on time. Some states have their own estate or inheritance taxes with much lower thresholds.
Example
An unmarried person who dies in 2026 with a $16,000,000 taxable estate is $1,000,000 over the exclusion and could owe up to about $400,000 in federal estate tax.
Illustrative numbers only. Your situation will differ.