Does the $15M Estate Planning Exemption Mean You Can Stop Planning?
Last reviewed: July 2026
The $15 million federal estate planning exemption is now permanent, and that is exactly why estate planning matters more, not less. For 2026, each individual can shield up to $15 million from federal estate tax, or $30 million for a married couple, under the One Big Beautiful Bill Act. But Maryland families face a state estate tax that kicks in at just $5 million, plus a separate inheritance tax that federal numbers never touch. A high exemption removes the federal tax problem for most families while leaving every other estate planning problem fully intact.
On This Page
- Key Takeaways
- What the Permanent $15M Estate Planning Exemption Actually Changed
- Why a Higher Exemption Makes Estate Planning More Important
- How the Maryland Estate Tax and Inheritance Tax Still Apply
- What Estate Planning Does That No Exemption Can Touch
- How Business Owners in Harford County Should Respond
- The R.U.D.D.E.R. Approach to Reviewing Your Estate Plan Now
- Frequently Asked Questions
- Disclosures
Key Takeaways
- The federal estate tax exemption is permanently set at $15 million per person, or $30 million per married couple, starting in 2026.
- Maryland imposes its own estate tax above a $5 million exemption, far below the federal threshold most families assume protects them.
- Estate planning controls who inherits, when, and how, which no exemption amount addresses.
- Maryland also levies an inheritance tax on certain heirs, separate from any estate tax owed.
- Permanence invites complacency, and complacency is what costs Harford County families the most.
About the Author: Jeff Judge, CFP®, AEP®, ChFC®, CLU® is Managing Partner of Chesapeake Financial Planners in Forest Hill, Maryland. He has been helping families and business owners in Harford County and the Baltimore metro area navigate estate planning since earning his CFP® certification in 2013, by using Chesapeake Financial Planners’ signature process, the R.U.D.D.E.R. method™. Jeff has watched more families lose money to outdated documents and missing beneficiary forms than to estate tax, and the permanent $15 million exemption makes that mistake easier to make.
What the Permanent $15M Estate Planning Exemption Actually Changed
The estate planning exemption is the dollar amount you can pass to heirs before the federal estate tax applies. For 2026, that figure is permanently set at $15 million per individual, or $30 million for a married couple, under the One Big Beautiful Bill Act signed in 2025. According to the IRS, the estate tax applies only to the value of an estate above the exemption amount.
What does "permanent" actually mean here?
Permanent means the exemption no longer faces the scheduled sunset that was set to cut it roughly in half at the end of 2025. Before this law, planners spent years preparing clients for a drop back toward $7 million per person. That cliff is gone. The number is now indexed for inflation going forward, which means it will rise over time rather than fall.
Here is the part that gets lost. Permanent does not mean unchangeable. A future Congress can amend any tax law, and estate tax thresholds have moved repeatedly over the last two decades. I often remind clients that "permanent in tax law means permanent until the next administration decides otherwise." Building a plan that only works at a $15 million exemption is a fragile plan.
For the vast majority of families in Harford County, the federal estate tax was never the binding constraint anyway. The exemption change removes a problem most people did not have while leaving every problem they do have untouched. estate tax exemption strategies
Why a Higher Exemption Makes Estate Planning More Important
A higher estate planning exemption makes planning more important because it removes the one motivator that historically pushed families to act. When the federal tax threat disappears, so does the urgency, and urgency was the only thing forcing many people to finally sit down and sign documents.
What happens when families stop planning?
When families stop planning, the default rules take over, and the default rules are rarely what anyone wants. Without a will, Maryland's intestacy statute decides who inherits, often splitting assets among relatives in proportions a person would never have chosen. Without an updated beneficiary designation, a retirement account can pass to an ex-spouse named twenty years ago. Without a trust, minor children can inherit large sums outright at age 18. revocable living trust planning
The Federal Reserve's 2022 Survey of Consumer Finances shows that a majority of American families hold the bulk of their net worth in a home and retirement accounts, both of which transfer through documents most people never review. A permanent exemption does nothing to fix a stale beneficiary form.
This is the trap of complacency. Families read a headline about a $15 million exemption, conclude estate planning is for the ultra-wealthy, and put it off again. I've watched this play out for two decades. The cost almost never shows up as estate tax. It shows up as probate delays, family disputes, and assets landing in the wrong hands.
How the Maryland Estate Tax and Inheritance Tax Still Apply
Maryland still taxes estates and certain inheritances regardless of the federal exemption, which is the single most overlooked fact for families in this state. Maryland is one of the few states that imposes both an estate tax and a separate inheritance tax, and the federal $15 million figure has no effect on either.
Where does the Maryland estate tax start?
The Maryland estate tax starts at a $5 million exemption, according to the Comptroller of Maryland. That is one third of the federal threshold. A Harford County family with a paid-off home, a business interest, and retirement accounts can cross $5 million without feeling wealthy. When that happens, Maryland taxes the estate even though no federal estate tax is owed.
The inheritance tax is a separate matter entirely. Maryland levies a 10% inheritance tax on assets passing to certain beneficiaries, with close relatives like spouses, children, and grandchildren generally exempt. The tax falls hardest on transfers to nieces, nephews, friends, and unmarried partners. The Register of Wills administers this tax at the county level.
Here is the comparison that matters most for Maryland residents:
| Feature | Federal Estate Tax | Maryland Estate Tax | Maryland Inheritance Tax |
|---|---|---|---|
| 2026 exemption | $15 million per person | $5 million per person | None for exempt heirs |
| Top rate | 40% | 16% | 10% |
| Who pays | Estates above $15M | Estates above $5M | Certain non-lineal heirs |
| Portability between spouses | Yes | No | Not applicable |
A married couple in Forest Hill or Bel Air who assumes they are covered by the $30 million federal exemption can still owe Maryland estate tax on assets above $5 million per spouse, and the state does not offer portability the way the federal system does. That single difference catches families every year.
What Are the Most Common Beneficiary Designation Mistakes?
What Estate Planning Does That No Exemption Can Touch
Estate planning controls who inherits, when they inherit, and under what conditions, none of which any exemption amount addresses. The exemption is a tax number. Estate planning is a control system. Confusing the two is the mistake that costs families the most.
What problems does estate planning actually solve?
Estate planning solves the problems that show up in every estate regardless of size. It names a guardian for minor children. It appoints someone to make medical and financial decisions if you are incapacitated. It keeps assets out of probate, which in Maryland can take months and become a matter of public record. It protects an inheritance from a beneficiary's divorce, creditors, or poor judgment.
Consider what the exemption cannot do. It cannot keep your business running if you are suddenly incapacitated. It cannot prevent your children from inheriting equally when one of them has a special need that requires careful planning to preserve government benefits. It cannot stop a blended-family dispute over who gets the house. According to Caring.com's 2024 wills survey, only about a third of American adults have any estate planning documents at all, and the leading reason cited is simple procrastination.
I put it directly with clients: the question is never whether your estate will be settled. It will be, one way or another. The only question is whether you wrote the rules or whether the state wrote them for you. That is the work a permanent exemption makes more important, because it removes the deadline that used to force the conversation.
A well-built estate plan also coordinates with lifetime strategies. A Roth conversion, for example, can reduce the income tax burden your heirs inherit along with your retirement accounts, since inherited traditional IRAs come with required distributions and ordinary income tax. When does a Roth conversion make financial sense and how do you execute it? The exemption number says nothing about this. The plan does.
How Business Owners in Harford County Should Respond
Business owners in Harford County face a sharper version of this problem because an illiquid business interest can push an estate over the Maryland $5 million threshold without producing any cash to pay the tax. A permanent federal exemption does not solve a liquidity problem.
Why is business ownership different?
Business ownership is different because the value sits in something you cannot easily sell, and the Maryland estate tax is due in cash. A manufacturing shop, a medical practice, or a commercial property in Forest Hill might represent most of an owner's net worth on paper while generating no liquidity at death. The estate still owes Maryland tax on that value. Heirs can be forced to sell the business at a discount, or under pressure, simply to cover the bill.
This is where buy-sell agreements, properly structured life insurance, and succession planning earn their place. buy-sell agreement funding strategies A funded buy-sell agreement gives surviving partners a way to buy out a deceased owner's share at a fair, predetermined price. Life insurance owned outside the estate can provide the liquidity to pay Maryland estate tax without touching the business. The Small Business Administration emphasizes that succession planning is one of the most neglected areas of small-business management. Jeff Judge notes: "A funded buy-sell agreement paired with life insurance owned outside the estate is often the only way to guarantee that heirs can pay a Maryland estate tax bill without being forced to sell the business at a fire-sale price."
The R.U.D.D.E.R. Method™ is Chesapeake Financial Planners' six-step planning process: Review and Recognize, Uncover and Understand, Design and Develop, Discuss and Decide, Execute and Empower, and Reassess and Refine. For a business owner, that process starts by recognizing that the company is an asset the estate tax sees clearly even when there is no cash behind it.
I work with owners across the Baltimore metro who built real value and assumed the federal exemption covered them. It often does, federally. Then the Maryland number and the liquidity question land at the same time. The families who plan ahead keep the business intact. The families who wait sometimes do not.
For owners thinking through transitions, our coverage of business succession planning and estate planning for business owners walks through the structures in detail.
How do Maryland business owners plan for estate and inheritance tax?
[business owner meeting with financial advisor about estate planning exemption]
The R.U.D.D.E.R.™ Approach to Reviewing Your Estate Plan Now
Reviewing your estate plan after the exemption change starts with confirming what your documents actually say, not what you assume they say. Most plans were built under a different set of tax rules, and the permanent exemption is a good reason to reopen them rather than a reason to ignore them.
What should you check first?
You should check your beneficiary designations first, because they override your will and they are the most common point of failure. Retirement accounts, life insurance, and transfer-on-death accounts pass by designation, not by will. A form naming a deceased relative or a former spouse will be honored exactly as written.
After beneficiaries, work through the rest in order:
- Confirm your will and any trusts reflect current law and current wishes. Plans drafted under the old sunset assumption may contain formula clauses that no longer behave as intended at a $15 million exemption.
- Check your powers of attorney and health care directives. These matter while you are alive, and an exemption change has nothing to do with whether they exist.
- Map your assets against the Maryland $5 million threshold. Include your home, business interest, and retirement accounts at realistic values.
- Review titling and ownership. How an asset is owned determines whether it passes through probate and whether spousal planning preserves the Maryland exemption.
- Coordinate income tax and estate planning together. Strategies like lifetime gifting using the 2026 annual exclusion of $19,000 per recipient can move value out of a taxable Maryland estate over time.
This is the kind of review the R.U.D.D.E.R. Method™ is built for, and it is work most families have not done since before the law changed. For families in Forest Hill, Bel Air, and across Harford County, the permanent exemption is the prompt to finally get current.
Our estate planning checklist for Maryland families lays out each of these steps in a format you can work through at your own pace. estate planning checklist for Maryland families
Frequently Asked Questions
Is the $15 million estate planning exemption really permanent?
The $15 million federal estate tax exemption is permanent under the One Big Beautiful Bill Act, meaning it no longer faces the scheduled 2025 sunset that would have cut it roughly in half. It is also indexed for inflation going forward. Permanent in tax law means it stays until a future Congress changes it, which has happened repeatedly with estate tax rules.
Do I still need estate planning if my estate is under $15 million?
Yes, you absolutely still need estate planning if your estate is under $15 million, because estate planning controls far more than federal estate tax. It names guardians, appoints decision-makers if you are incapacitated, avoids probate, directs who inherits, and protects assets from a beneficiary's creditors or divorce. The exemption is a tax number, not a substitute for a plan.
How does the Maryland estate tax differ from the federal exemption?
The Maryland estate tax starts at a $5 million exemption, one third of the federal $15 million figure, and Maryland does not offer portability between spouses. A Harford County family can owe Maryland estate tax with no federal tax due. Maryland also imposes a separate 10% inheritance tax on assets passing to certain non-lineal heirs like nieces, nephews, and unmarried partners.
What is the Maryland inheritance tax and who pays it?
The Maryland inheritance tax is a 10% tax on assets passing to certain beneficiaries, separate from any estate tax. Close relatives such as spouses, children, parents, and grandchildren are generally exempt. The tax falls on transfers to nieces, nephews, cousins, friends, and unmarried partners. It is administered by the Register of Wills at the county level and applies regardless of the federal exemption.
Why does the permanent exemption make estate planning more urgent, not less?
The permanent exemption makes planning more urgent because it removes the deadline that historically forced families to act. When the federal tax threat fades, complacency sets in, and families default to outdated documents and stale beneficiary forms. The cost rarely appears as estate tax. It shows up as probate delays, family disputes, and assets passing to the wrong people.
How does a business interest affect my Maryland estate tax?
A business interest counts toward your Maryland estate at its fair market value, which can push you over the $5 million threshold without producing any cash to pay the tax. Because Maryland estate tax is due in cash, heirs may be forced to sell the business under pressure. Funded buy-sell agreements and life insurance owned outside the estate provide liquidity to prevent that.
What should I review in my estate plan after the exemption became permanent?
Start with beneficiary designations, since they override your will and fail most often. What Is the Difference Between Financial and Healthcare Power of Attorney? Then confirm your will and trusts reflect current law, check your powers of attorney and health care directives, map your assets against the Maryland $5 million threshold, and review how assets are titled. Plans built under the old sunset assumption may contain clauses that no longer work as intended.
Estate planning after a permanent $15 million exemption is not about chasing a tax you probably do not owe. It is about controlling what actually happens to your family, your business, and your assets, which no exemption number will ever decide for you. Jeff Judge and the Chesapeake team serve families and business owners across Harford County, Forest Hill, Bel Air, and the Baltimore metro. Schedule a free fit call at chesapeakefp.com to make sure your plan reflects the law as it stands today.
This post is adapted from 'The $15M Estate Exemption Is Making Families Complacent' originally published on Jeff Judge's LinkedIn.
Disclosures
The information provided is for educational purposes only and should not be construed as investment advice. Investment strategies should be tailored to individual circumstances, risk tolerance, and goals. Past performance doesn't guarantee future results. Consult with qualified financial professionals regarding your specific situation.
This information is not intended to be a substitute for specific individualized tax, investment or legal advice. We suggest that you discuss your specific situation with a qualified tax, legal or financial advisor.
Advisors associated with Chesapeake Financial Planners may be either (1) LPL Financial Registered Representatives offering securities through LPL Financial, Member FINRA and SIPC, and investment advisor representatives offering investment advice through Great Valley Advisor Group; or (2) solely investment advisor representatives offering investment advice through Great Valley Advisor Group and not affiliated with LPL Financial. Great Valley Advisor Group, and Chesapeake Financial Planners are separate entities from LPL Financial.
