05/27/2026
Most people know the federal government can tax your estate. What many don't realize is that your state might too and the exemptions can be much lower than you'd expect.
Let's break it down.
On the federal level, the estate tax exemption is relatively high. For 2026, the IRS has set the basic exclusion amount at $15,000,000. That means most people won't owe federal estate tax. But "most people" isn't everyone, and for those with major assets, failing to plan for it can take a meaningful bite out of what you
leave behind.
On the state level, it gets more complicated.
Currently, 12 states and Washington D.C. impose their own estate tax. These include Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, and Washington. If you live in one of these states, you may face estate tax at a much lower threshold than the federal level.
Massachusetts, for example, has historically had one of the lowest exemptions in the country. That means residents with far more modest estates can still find themselves subject to state estate tax, often without realizing it until it's too late to plan.
This is why where you live matters as much as what you have.
The good news? With the right planning, state estate tax doesn't have to be a burden on the people you're leaving behind. Strategies like lifetime gifting, charitable giving, life insurance, and trust planning can all help reduce or eliminate exposure, but they work best when put in place well before they're needed.
Estate planning isn't just for the ultra-wealthy. If you live in one of these states and have worked hard to build something meaningful, this is a conversation worth having sooner rather than later.
At Team SKG, we help clients navigate exactly these kinds of decisions. Drop a comment or send us a message. We're happy to take a look at your situation and help you protect what you've built.
