If you have been wondering whether your family will owe estate taxes, gift taxes, or inheritance taxes in 2026, you are not alone. These are some of the most common questions people ask when updating their estate plan, helping children financially, or trying to protect what they have built.

The good news is that for most Arizona families, there is no Arizona estate tax, no Arizona inheritance tax, and no immediate federal estate tax concern unless the estate is very large.

That said, there are still important federal rules to understand—and there are also some other states that still impose death taxes.

Below is a simple breakdown of what you need to know.

Federal Estate Tax Exemption in 2026

In 2026, the federal estate tax exemption is:

$15,000,000 per person

That means a person can pass up to $15 million at death before federal estate tax would generally apply.

For a married couple, with proper planning, that can often mean:

Up to $30,000,000 protected

Anything above that amount may be taxed at rates up to 40%.

For most families, this means they will not owe federal estate tax. But that does not mean estate planning is unnecessary. Estate planning is still essential for avoiding probate, protecting children, keeping peace in the family, and making sure assets pass the way you want.

Federal Gift Tax Rules for 2026

In 2026, you can give:

$19,000 per person, per year

without using your lifetime exemption.

For example, if you have 3 children and 4 grandchildren, you could give each one $19,000 in 2026.

If you are married, you and your spouse can often give:

$38,000 per recipient per year

with proper planning.

If you give more than that to one person in one year, it does not automatically mean you owe gift tax. It usually just means you may need to file a gift tax return and track how much of your lifetime exemption you have used.

What Is the Federal Lifetime Exemption?

The federal lifetime exemption in 2026 is also:

$15,000,000 per person

This exemption covers both:

• gifts made during life

• transfers made at death

So if someone makes a large gift during life, it may reduce what remains available later for estate tax purposes.

This is one reason it is important to plan carefully before transferring large amounts of money, real estate, or business interests.

Is There a Federal Inheritance Tax?

No. There is no federal inheritance tax.

That means a beneficiary does not usually pay a federal tax simply because they inherited money or property.

However, some inherited assets can still create income tax consequences, including:

• Traditional IRAs

• 401(k)s

• Certain annuities

• Trust income

So while a family may avoid estate tax, there can still be tax issues that need to be planned for.

Does Arizona Have an Estate Tax or Inheritance Tax?

No. Arizona does not have a state estate tax.

No. Arizona does not have a state inheritance tax.

No. Arizona does not have a separate state gift tax.

This is one reason Arizona can be a very favorable state for estate planning.

For Arizona families, the bigger concerns are often:

• avoiding probate

• using trusts properly

• preserving a step-up in basis

• coordinating retirement accounts

• protecting children and beneficiaries

• preventing conflict later

What States Still Have Estate or Inheritance Taxes?

Although Arizona does not impose a death tax, some states still do.

States with some form of estate tax include:

• Connecticut

• District of Columbia

• Hawaii

• Illinois

• Maine

• Maryland

• Massachusetts

• Minnesota

• New York

• Oregon

• Rhode Island

• Vermont

• Washington

States with some form of inheritance tax include:

• Kentucky

• Maryland

• Nebraska

• New Jersey

• Pennsylvania

This matters if you:

• moved from another state

• own property in another state

• inherited from someone who lived elsewhere

• have family spread across multiple states

What Taxes Matter More Than Estate Tax for Many Families?

Even when no estate tax is due, there are still tax issues that can matter a lot.

1. Capital Gains Tax

Many assets receive a step-up in basis at death, which can reduce capital gains taxes significantly.

2. Income Tax on Retirement Accounts

Inherited IRAs, 401(k)s, and similar assets may create taxable income for beneficiaries.

3. Trust and Estate Income Tax

Trusts and estates can owe income tax after death if assets remain in trust or administration continues.

For many families, these issues matter more than estate tax itself.

What Is Expected Over the Next 10 Years?

No one can predict tax law with certainty, but under current law, the federal estate and gift tax exemption is expected to continue increasing gradually with inflation.

That means the federal exemption will likely remain high for the foreseeable future unless Congress changes the law.

Arizona is also expected to remain a state with:

• no estate tax

• no inheritance tax

• no gift tax

Bottom Line for Arizona Families

For most Arizona families in 2026, the biggest concern is not federal estate tax.

The real planning issues are usually:

• Who will be in charge if something happens to you

• How to avoid probate

• How to protect your spouse or children

• How to keep family conflict to a minimum

• How to make sure assets pass efficiently and correctly

That is where a well-designed estate plan becomes incredibly valuable.

Need Help Reviewing Your Estate Plan?

At The Forakis Law Firm, we help Arizona families create estate plans designed to bring peace, clarity, and protection.

If you would like help reviewing your current plan—or creating one that truly fits your family—we would be happy to help.

Call us today to schedule a consultation.