Federal Estate Tax

The material found on this site is for general information only. Concepts included on this site dealing with federal estate tax issues may not be the most acceptable or best solutions to your situation. You should consult your attorney and tax professional for advice on your particular situation.

The Federal Estate Tax is a transfer tax on the value of your assets at death. The Federal Estate Tax is calculated on the value of those assets at the time of your death. Included in your taxable estate would be ownership of real property, business assets, financial accounts, retirement plans, and life insurance death benefits of which you are the owner. Estate tax is generated on estates with a valuation of over $5,450,000 (2016 value).

Fortunately, there are a number of estate planning tools available that can be utilized to reduce, and possibly eliminate, the federal estate tax.

2016 Federal Estate Tax Applicable Exclusion Amount
$5,450,000 Exemption Per Person
40% Federal Estate Tax Maximum Rate

2016 Annual Gift Tax Exclusion
$14,000 Individual
$28,000 Married Couple
Annual gift tax exclusion - You may give as much as $14,000 per year to any number of individuals without incurring federal gift tax and without having to file a gift tax return. If your spouse consents to the gift, you can give up to $28,000 to each individual, without incurring federal gift tax, but a gift tax return must be filed.

2016 Non-grantor Trust and Estate Income Tax Rates

Taxable Income Base amount of tax: + Rate on Excess:
$ 0 but not over $2,550 $0 15%
$2,551 - $5,950 $382.50 25%
$5,951 - $9,050 $1,232.50 28%
$9,051 - $12,400 $2,100.50 33%
Over $12,400 $3,206.00 39.6%


This information is provided as a guide only. It is not intended to constitute tax or legal advice. This chart represents State Farm's understanding of the tax laws in effect on the printing date. You should contact your qualified tax advisor for specific advice.

Neither State Farm® nor its agents provide tax or legal advice.

State Farm Life Insurance Company (Not licensed in MA, NY or WI)
State Farm Life and Accident Assurance Company (Licensed in NY and WI)
Bloomington, IL

IL - 28.7