Estate Tax Calculator
Free 2026 estate tax calculator. Estimate federal estate tax with the $15M basic exclusion amount, graduated 18-40% rates, portability election, and taxable estate breakdown.
Life Insurance Estate Calculator
Free life insurance estate worksheet. Estimate how policy ownership changes a taxable-estate scenario using the exemption amount you want to model.
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$
Enter the exemption scenario you want to model
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$
%
Tax If You Own Policy⧉
$4,695,000.00
Effective rate: 20.41%
Tax If ILIT Owns Policy⧉
$2,195,000.00
Insurance excluded from estate
ILIT Tax Savings⧉
$2,500,000.00
Difference in estate tax owed
Net to Heirs (You Own)⧉
$18,305,000.00
Estate minus taxes
Net to Heirs (ILIT)⧉
$20,805,000.00
Estate − tax + death benefit outside estate
Premium Leverage Ratio⧉
31.3x
Tax savings per dollar of annual premium
Tax Comparison: Owned vs. ILIT
Tax (You Own)
$4,695,000.00
Tax (ILIT)
$2,195,000.00
Savings
$2,500,000.00
Detailed Side-by-Side Comparison
| Item | You Own Policy | ILIT Owns Policy | Difference |
|---|---|---|---|
| Gross Estate | $23,000,000.00 | $18,000,000.00 | -$5,000,000.00 |
| Death Benefit (outside estate) | $0.00 | $5,000,000.00 | $5,000,000.00 |
| Effective Exemption | $13,610,000.00 | $13,610,000.00 | — |
| Taxable Estate | $9,390,000.00 | $4,390,000.00 | -$5,000,000.00 |
| Federal Estate Tax | $3,756,000.00 | $1,756,000.00 | -$2,000,000.00 |
| State Estate Tax | $939,000.00 | $439,000.00 | -$500,000.00 |
| Total Estate Tax | $4,695,000.00 | $2,195,000.00 | -$2,500,000.00 |
| Net to Heirs | $18,305,000.00 | $20,805,000.00 | $2,500,000.00 |
Reference assumption: this worksheet uses a flat federal reference rate of 40.00% on the taxable amount. Use it as a planning simplification, not a live estate-tax table.
Planning notes, formulas, and examples
About the Life Insurance Estate Calculator
Life insurance death benefits are generally income tax-free to beneficiaries. In estate planning, the bigger question is often whether the policy is owned in a way that causes the death benefit to be treated as part of the taxable-estate scenario you are modeling.
This page is a worksheet for comparing ownership structures and exemption assumptions. It is not a live estate-tax table and does not attempt to publish current law amounts.
Use it to compare a policy you own directly against an ILIT-style structure or other ownership assumption, then confirm the actual planning result with counsel.
When This Page Helps
Life insurance intended to provide for your family can have very different estate-planning outcomes depending on how the policy is owned. This worksheet helps you compare those scenarios without pretending to give a live-law answer.
How to Use the Inputs
- Enter your total estate value (excluding life insurance).
- Enter the life insurance death benefit.
- Enter the exemption scenario you want to model.
- Compare estate tax with and without an ILIT-style ownership assumption.
- Review the worksheet savings from trust ownership.
Formula used
Estate With Insurance = Estate Value + Death Benefit
Estate Tax = max(0, (Estate With Insurance − Exemption)) × reference rate
ILIT Savings = Estate Tax With Insurance − Estate Tax Without InsuranceExample Calculation
Result: $1,000,000 estate tax
Estate $14M + $3M death benefit = $17M. Minus $15M exemption = $2M taxable. Using the worksheet reference rate plus the example 10% state rate, the estate tax amount is $1,000,000. Without the insurance in the estate, the $14M estate would be entirely exempt under this scenario.
Tips & Best Practices
- An ILIT is a common planning structure, but the worksheet should still be checked against actual ownership and transfer facts.
- Policies transferred close to death can create different results than policies owned by the trust from the start.
- Annual gifts used to fund premiums may have gift-tax consequences depending on how they are structured.
- Second-to-die policies are often used in married-couple planning.
- Review policy ownership even if your estate is below the exemption scenario you entered.
When an ILIT Makes Sense
An ILIT is most useful when you want to compare direct ownership against trust ownership in an estate-planning worksheet. It is also useful when you want to see how a death benefit changes the taxable-estate scenario you are modeling.
ILIT Setup and Cost
Establishing an ILIT can involve legal fees and ongoing administration. Those costs are separate from the estate-tax worksheet and should be evaluated on their own.
Ownership Matters
This page is intentionally framed as a scenario worksheet. If the policy ownership, transfer timing, or exemption assumption changes, rerun the worksheet with the updated inputs.
Sources & Methodology
Last updated:
Methodology
This page is a planning worksheet, not a legal conclusion about estate inclusion. It applies the estate value, death benefit, and exemption assumptions you enter to compare ownership scenarios such as direct ownership versus an ILIT-style structure. The worksheet is meant to help users compare estate-planning cases, not to determine how a court or the IRS would treat a specific policy.
Sources
- Publication 559 (2025), Survivors, Executors, and Administrators (Internal Revenue Service) — Official IRS reference on estate administration and life-insurance proceeds in the estate context.
- Estate tax (Legal Information Institute, Cornell Law School) — General background on how estate tax applies to the taxable estate at death.
Frequently Asked Questions
Life insurance death benefits are generally income tax-free to beneficiaries. This worksheet focuses on whether the death benefit is part of the taxable-estate scenario being modeled.
An Irrevocable Life Insurance Trust is a trust that can own life insurance policies and keep them outside the insured person's ownership scenario. The worksheet shows how that changes the result.
Yes, but the estate outcome depends on ownership, transfer timing, and the scenario assumptions you enter. The worksheet lets you compare ownership setups without making a legal conclusion.
Premiums are often funded by annual gifts or other trust funding methods. The exact tax treatment depends on the structure you use.
The trust receives the death benefit and then distributes or manages it according to the trust terms. The worksheet simply shows how that ownership assumption changes the estate-side estimate.
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