Missouri doesn’t have an estate tax — but that doesn’t mean Missouri families are exempt.
Most Missourians are relieved to hear that Missouri has no state estate tax, no inheritance tax, and no gift tax. But this creates a false sense of security, because:
✔ The federal estate tax still applies
✔ The 2026 federal tax change will impact thousands of Missouri families
✔ Poor planning can result in avoidable taxation
✔ Many people don’t realize their life insurance counts toward their taxable estate
This guide breaks down what Missouri families really need to know:
- Whether Missouri has any state-level estate taxes
- When the federal estate tax applies
- How the upcoming 2026 sunset will affect you
- How trusts can reduce or eliminate estate taxes
- How gifting works
- How life insurance affects your estate
- How to protect your family from taxation you didn’t expect
Let’s begin.
Does Missouri Have an Estate Tax?
No. Missouri does NOT have:
- a state estate tax
- a state inheritance tax
- a state gift tax
This places Missouri among the most tax-friendly states for estate planning.
However…
The Bigger Issue — The Federal Estate Tax
Even with Missouri’s friendly laws, every family is still subject to the federal estate tax.
The federal estate tax exemption in 2025 is:
$13.61 million per person
$27.22 million per married couple (with portability)
This means your estate must exceed those amounts before federal estate taxes apply.
What Counts Toward the Federal Estate Tax?
This is where Missouri families get surprised.
Everything you own is counted, including:
- real estate
- retirement accounts
- investment accounts
- business interests
- farms
- life insurance (yes, ALL of it)
- vehicles
- collectibles
- savings
- personal property
The number that matters is the total value of everything you own at death.
Why Life Insurance Creates Unexpected Estate Tax Problems
Many Missourians have $1 million, $2 million, or $5 million in life insurance.
What they don’t know is:
Life insurance proceeds are included in your taxable estate if you own the policy.
This pushes many families over the federal threshold.
The solution is simple:
✔ Use an Irrevocable Life Insurance Trust (ILIT)
An ILIT:
- owns the policy
- removes the death benefit from your estate
- protects the proceeds from creditors
- ensures taxes aren’t triggered unnecessarily
This is essential for anyone with large policies.
How Married Couples Can Double Their Exemption
Two key techniques:
1. Portability
Portability allows the surviving spouse to use the deceased spouse’s unused exemption.
Example:
Husband dies with a $3M estate → wife files an estate tax return → she “inherits” the unused exemption → couple preserves full $27M combined exemption.
BUT…
Portability only works if:
- a federal estate tax return is filed within 9 months
- the return is prepared correctly
- all rules are met
Many families lose millions because they fail to file.
2. Credit Shelter Trusts (Bypass Trusts)
Before portability existed, bypass trusts were the standard.
Today, with the 2026 sunset coming, bypass trusts are back in style.
A bypass trust:
- captures the first spouse’s exemption
- protects assets from remarriage
- ensures children inherit
- preserves wealth long-term
For estates over $6–8 million, this is essential planning.
Estate Tax Strategies for Missouri Families
Here are the most effective strategies — depending on your wealth level.
Strategy A: For Estates Under $6 Million
Focus on:
- revocable living trust
- beneficiary coordination
- avoiding probate
- incapacity planning
- avoiding accidental disinheritance
No major tax planning needed yet — but plan ahead as wealth grows.
Strategy B: For Estates $6M–$15M (2026 Risk Zone)
Recommended strategies:
✔ Credit Shelter Trust (Bypass Trust)
✔ Portability election
✔ Annual gift strategies
✔ Life insurance review
✔ Family limited liability companies (FLLCs)
✔ Charitable planning
Strategy C: For Estates Over $15M
High-net-worth families should consider:
✔ Spousal Lifetime Access Trust (SLAT)
✔ Irrevocable Life Insurance Trust (ILIT)
✔ Grantor Retained Annuity Trust (GRAT)
✔ Family Limited Partnerships
✔ Large lifetime gifts before 2026
✔ Charitable remainder trusts (CRAT/CRUT)
These strategies create significant tax savings and wealth transfer advantages.
Gifting Strategies for Missouri Families
The IRS allows:
$18,000 annual gift exclusion (2025)
$36,000 for married couples
These gifts do NOT require filing a gift tax return.
Larger gifts reduce your lifetime estate tax exemption, but can be extremely strategic — especially before the 2026 sunset.
Charitable Giving to Reduce Estate Taxes
Charitable strategies can:
- eliminate capital gains
- reduce taxable estate value
- provide income to heirs
- support meaningful causes
Common tools:
- Donor-advised funds
- Charitable remainder trusts (CRUT/CRAT)
- Charitable lead trusts
- Outright charitable gifts
These techniques are especially useful for business owners and high net-worth families.
Common Mistakes Missouri Families Make
Avoid:
❌ Assuming Missouri has no estate taxes (true) → assuming you’re safe (false)
❌ Forgetting that life insurance is taxable
❌ Failing to file for portability
❌ Leaving everything to a spouse outright
❌ Relying only on a will
❌ Not reviewing beneficiaries
❌ Not funding a trust
These mistakes can trigger taxes that could have been avoided.
Final Thoughts — Missouri Families Need to Plan Ahead for 2026
Even though Missouri has no estate tax, your estate is still subject to:
✔ the federal estate tax
✔ the upcoming 2026 exemption reduction
✔ potential taxation on life insurance
✔ additional taxes on large retirement accounts
The key is to:
- plan early
- use trusts strategically
- coordinate beneficiaries
- file for portability
- avoid unnecessary taxation
Smart planning protects your wealth and ensures more passes to your spouse, children, and legacy — not the IRS.
Want to Protect Your Estate From the 2026 Tax Changes?
We help Missouri families:
- reduce or eliminate federal estate taxes
- design trusts that protect assets
- structure tax-efficient transfers
- review life insurance and ILIT options
- navigate high net-worth planning
- complete everything virtually