Why I Suggest Regular Families Have an Estate Plan, Even With a $15 Million Estate Tax Exemption

"If the government only taxes estates over $15 million, why would somebody like me need an estate plan?"

The estate tax was never the thing most likely to cost your family money. For most households in middle Georgia, the real leaks are income taxes on inherited accounts, outdated beneficiary forms, and assets that end up in the wrong hands or stuck in probate. None of those problems care one bit about the $15 million line.

Does the $15 million exemption mean I can skip estate planning?

No, because estate planning was never mainly about the estate tax. For deaths in 2026, the federal basic exclusion amount is $15 million per person, and a married couple can effectively shield twice that. Anything above the exemption faces a federal estate tax of up to 40 percent, but most families will never touch it.

Georgia makes it even simpler. Georgia has no state estate tax or inheritance tax, so the federal rules are the only death tax rules that apply here, and they exempt almost everyone.

Think of it like a weight limit on an elevator. Just because you're under that cap, it doesn't mean the elevator won't break or have a problem. It's just a guideline to tell us where we go from "potential issues" to "definitely issues." In that way, the government tells us they know for a fact you'll be taxed on anything above that $15 million limit. It doesn't mean you won't be taxed at all.

If there is no estate tax, what can still go wrong?

Plenty, and I have watched most of it happen to good families. The common trouble spots are income taxes on inherited retirement accounts, beneficiary forms that no longer match the family, and accounts with no beneficiary at all, which usually means probate.

Start with beneficiary designations. On IRAs, 401(k)s, life insurance, and annuities, the beneficiary form controls who gets the money, and in most cases a beneficiary designation overrides your will. I have seen an ex-spouse still listed on a form from two jobs ago. No estate tax was owed. The money still went to the wrong person.

Then there are pre-tax retirement accounts. A traditional IRA or 401(k) passes to your kids with an income tax bill attached, because withdrawals are taxed as ordinary income to them, often during their peak earning years. Most non-spouse beneficiaries also have to empty the account within ten years under the inherited IRA 10-year rule. A $500,000 IRA is not really a $500,000 inheritance. It is more like a job lot of taxable income on a deadline.

What taxes do heirs actually pay?

Here is the simple scorecard. An inheritance itself is generally not taxable income to the person who receives it. Inherited property like a home or stocks generally gets a basis reset to its value at the owner's death, which can wipe out capital gains built up over a lifetime. Life insurance death benefits are generally not includable in the beneficiary's gross income at all.

Pre-tax retirement money is the outlier, taxed as ordinary income when heirs withdraw it. That contrast is exactly why which assets you leave to which people matters more for most families than any estate tax calculation.

What does a smart legacy plan look like for a regular family?

It usually comes down to a handful of unglamorous moves. Review every beneficiary form after any marriage, divorce, birth, or death in the family. Get a proper will, and for the legal documents themselves, wills, trusts, and powers of attorney, sit down with a qualified estate attorney; that is their lane, not mine. Position assets on purpose, so tax-friendly dollars go to your people and tax-heavy dollars get a withdrawal plan. Consider whether life insurance or an annuity with named beneficiaries fits, since both pay directly to your people without waiting on probate.

If you want to make gifts while you are living, the IRS allows up to $19,000 per recipient in 2026 without even filing a gift tax return. You get to watch the money help, which is something no estate plan can do after the fact.

Frequently asked questions

Do most people in Georgia owe any tax when they inherit?

Usually not on the inheritance itself. There is no Georgia estate or inheritance tax, and the federal exemption covers estates up to $15 million in 2026. The tax that surprises families is ordinary income tax on inherited pre-tax retirement accounts.

Is a will enough on its own?

A will is essential, but it does not control accounts with beneficiary designations, and it does not fix an income tax problem inside an IRA. Think of the will as the frame of the house and beneficiary forms and asset positioning as the plumbing.

When should I review my estate plan?

After every major family change, and at least every few years. Beneficiary forms, account titles, and the mix of taxable and tax-free assets all drift over time, the same way a fence line needs walking every so often.

Why should I jump through hoops to make this easier for my beneficiaries?

The answer is two-fold. First, your beneficiaries will likely inherit your estate at the height of their earning years, which can push them into tax consequences nobody intended. Second, it's less about what your beneficiaries get and more about what you believe the government should receive. Most people I talk with care more about the government not taxing their remaining estate to the hilt than the exact net amount left to their heirs. Let's be clear about one thing, though: this is about your preferences for your remaining estate. How you feel about the legacy you want to leave behind dictates the strategy you should use to set it up according to your wishes.

Here's the long and short of it all; the $15 million exemption took the estate tax off the table for most families. It did not take planning off the table. If you want to understand how your accounts would actually pass to your family, that is a conversation I have every week at my office here in Perry, and I am happy to have it with you.

This article is educational only and is not tax, legal, or investment advice. Please consult a qualified tax professional or estate attorney about your specific situation. Crossroads Financial works alongside your tax and legal advisors.