Will I owe estate taxes?

Probably not. For persons dying in 2023, estimates show that more than 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 2023 has the ability to shelter up to $12.9 million 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 $12.9 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 estate tax exemption 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. Right now, you may not need any tax planning, but if Congress changes the law, it may affect more Americans. As of time of writing this article, the 2023 12.9 million figure is set to expire and revert back to an inflation adjusted $5 million on January 1, 2026 unless Congress changes the law between now and then.