On this page
At the end of the projection, CoastMath values everything that’s left and settles the estate. Debts and unpaid bills come off first, then your settlement costs, an optional state estate tax, and federal estate tax on the amount above the exemption. What remains is the net estate. Separately, CoastMath estimates the income tax your heirs will owe on inherited pre-tax accounts.
If your partner survives you, the estate passes under the unlimited marital deduction. No estate tax or heirs’ income tax is charged, and the survivor’s later estate isn’t projected.
The estate is valued at the end of the plan’s final year, in that year’s dollars. By default the plan ends in the year you reach your life expectancy. Set Plan ends to At the last survivor’s longevity age to follow the household until the second death. The estate is then settled at that death, with no marital deduction.
- Basic exclusion per person
- $15,000,000
- Rate on the taxable estate above it
- 40%
After 2026 the exclusion grows with your plan’s inflation assumption. The law indexes it to a published price index, so later projected amounts are estimates. With Override the federal estate exemption, the amount you enter is used as is, in the year of death, with no indexing. Lifetime taxable gifts don’t reduce the exemption, because gifts aren’t modeled.
- Settlement costs are your fixed amount plus your percentage of the gross estate. They’re deducted before any tax.
- State estate tax, when you turn it on, is your flat rate on the amount above your state exemption. Your exemption isn’t indexed. The state tax is deducted before the federal tax, as federal law allows.
- Federal estate tax is 40% of what’s left above the exemption, plus any unused exemption carried over from a partner.
- 529 accounts aren’t part of the gross estate. They’re added back after estate tax, since they pass to the account’s successor owner.
- Charitable bequest is your percentage of the estate after settlement costs. It is deducted before estate tax and shown on its own line.
- Selling costs on real assets are your percentage of the property’s value. They reduce net estate but not the taxable estate.
| Gross estate | $1,000,000 | |
|---|---|---|
| − | Charitable bequest10% of the estate | $100,000 |
| − | Federal estate tax40% × ($900,000 − $500,000) | $160,000 |
| − | Selling costs6% of $400,000 | $24,000 |
| = | Net estate | $716,000 |
| Gross estate | $20,000,000 | |
|---|---|---|
| − | Settlement costs2% of the gross estate | $400,000 |
| = | Estate before tax | $19,600,000 |
| − | State estate tax12% above a $2,000,000 state exemption | $2,112,000 |
| − | Federal estate tax40% × ($19,600,000 − $2,112,000 − $15,000,000) | $995,200 |
| = | Net estate | $16,492,800 |
| − | Heirs’ income tax on a $1,000,000 IRA30% × ($1,000,000 − $352,000 of estate tax attributable to it) | $194,400 |
| = | Net to heirs after their income tax | $16,298,400 |
The state rate, state exemption, settlement percentage and heirs’ rate are inputs, not a particular state’s law.
Show data
| Step | Amount |
|---|---|
| Gross estate | $20,000,000 |
| Settlement costs | −$400,000 |
| State estate tax | −$2,112,000 |
| Federal estate tax | −$995,200 |
| Net estate | $16,492,800 |
| Heirs’ income tax | −$194,400 |
| Net to heirs | $16,298,400 |
When your partner dies first and Elect portability of a deceased partner’s unused exemption is checked, their exemption for their death year is added to yours. It stays at that amount. CoastMath assumes everything passed to you, so their whole exemption was unused. In the example above, a partner who died in 2026 would add $15,000,000. The federal tax would be $0, and net estate would rise to $17,488,000. With an override, the overridden amount is used for both exemptions.
When your partner is alive at the end of the plan, the marital deduction applies and the Estate card shows the estate tax as deferred. Settlement costs are still deducted.
When you both die in the same year, the household leaves two estates. Each gets its own federal exemption, and its own state exemption if state estate tax is on, with or without portability. CoastMath assumes the assets divide so that both exemptions are used.
- Traditional IRA and 401(k) balances are taxed to heirs at your Heirs’ income tax rate on inherited pre-tax accounts. The rate applies after deducting the federal estate tax attributable to those balances. At 0%, no heirs’ tax is estimated.
- HSA balances are treated the same way, since a beneficiary other than a spouse owes income tax on them. A surviving partner’s inherited HSA stays an HSA.
- Roth balances pass without income tax.
- Taxable accounts and property count at market value, and no tax on their unrealized gains is estimated while step-up is on. Turn step-up off and enter Heirs’ capital gains rate on inherited taxable gains to charge that rate on the unrealized gain in brokerage and crypto accounts, as if heirs sold everything with your basis. Not applied when a surviving partner inherits.
If your partner dies during the plan, Step up cost basis on partner-owned taxable accounts at their death resets the basis of their brokerage and crypto accounts to market value. You then sell those accounts with less taxable gain. Joint accounts keep their basis unless you check Also step up joint taxable accounts at the first death: then the deceased partner’s half steps up, so the basis becomes half the old basis plus half the market value. If you live in a community property state at that death (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin), the whole joint account steps up to market value. For how the survivor’s taxes and accounts change, see When a partner dies.
The card reconciles Total assets down to Net estate in future dollars. It shows each deduction, exemption and tax. When heirs inherit pre-tax balances, it adds Heirs’ income tax on inherited pre-tax balances and Net to heirs after their income tax. What this estimate leaves out lists the limits above. Charitable bequests aren’t deducted; lifetime giving is covered in Charitable giving, donor-advised funds and QCDs.