Estate Tax Projection Tool

Will your estate actually owe estate tax, or are you worrying about a bill you’ll never see? For 2026 the federal exemption is so high that most families clear it easily. The trap is the state tax sitting underneath it, the one almost nobody plans for. This tool projects both.

The decision it solves

The federal estate and gift tax exemption for 2026 is $15,000,000 per person, set by the 2025 tax law and indexed for inflation starting in 2027. A married couple can shield $30,000,000 between them with proper planning. Below that, the federal estate tax is a non-issue for the vast majority of families, even affluent ones.

That’s precisely why the state tax is the real story for New York residents. New York runs its own estate tax with a far lower exclusion, and a feature that turns a near-miss into a full hit. The decision this tool drives is whether you need to actively manage your taxable estate down, and if so, by how much and toward which threshold.

How the math works

The projection adds up everything you own at death: investments, real estate, the often-forgotten death benefit of any life insurance you own outright, business interests, retirement accounts. It nets out debts, then compares the total against the exemptions that apply to you.

Federally, only the amount above $15,000,000 per person is exposed. New York is where it gets sharp. For 2026 the New York exclusion is about $7,350,000. But New York uses a cliff. Go more than 5% over the exclusion, past roughly $7,717,500, and you don’t just tax the excess. The entire estate becomes taxable from the first dollar. The tool shows where you stand against both lines and flags the cliff zone, that narrow band just above the exclusion where a small reduction in your taxable estate saves a wildly outsized amount of tax.

A worked example

A widowed New York retiree has a $9,000,000 estate: a $4M portfolio, a $3M home, and $2M in IRAs.

Federally, she’s nowhere near the $15,000,000 line. Zero federal estate tax. Most people stop there and assume they’re safe.

New York tells a different story. Her $9M sits well above the roughly $7,717,500 cliff, so the whole $9,000,000 is subject to New York estate tax, not just the slice over the exclusion. If instead she had brought her taxable estate down toward the exclusion, through lifetime gifting or charitable transfers, she could have cut that New York bill dramatically. The cliff means the dollars just above the line are the most expensive dollars in the entire estate.

The lever most people miss

You can shrink a taxable estate while you’re alive without triggering tax, using the annual gift exclusion: $19,000 per recipient in 2026, given to as many people as you like, year after year. A couple can move $38,000 per child or grandchild annually, completely outside the estate, with no dent in the lifetime exemption. Over a decade across several heirs, that’s real money walked out the door tax-free. There’s also a basis tradeoff to weigh: assets you hold until death get a step-up in basis that erases capital gains for your heirs, while assets you gift carry your original cost basis along with them. See 2026 annual gifting limits and the NY estate tax threshold and cliff.

If your estate is large

Above the federal line, or sitting in the New York cliff zone, the planning gets real: irrevocable trusts, charitable structures, and gifting strategies that move appreciation out of your estate while you still control the timing. The window to use today’s high federal exemption is open now, and these moves take years to set up properly, not weeks.

Project the number against both lines before you assume you’re clear. The federal tax may never touch you. New York’s cliff is the one that bites.