When people are getting ready to estate plan, they often ask whether they will have to pay inheritance taxes. Missouri removed its state inheritance tax back in 2005, so there is no Missouri state inheritance tax in 2026. However, federal inheritance taxes exist, and the law often changes. Understanding how to account for this is best done with the help of an experienced lawyer.
The estate planning attorneys at Mark Harford Law help you plan for estate tax considerations and best protect your assets. There are things you can do now that can make a big difference in the future.
Missouri No Longer Has an Inheritance Tax
Missouri doesn’t have a state inheritance tax. In fact, that was repealed back in 2005. Since that time, the state has not collected a state-level inheritance or estate tax.
This means that, as of 2026:
- Heirs do not pay Missouri inheritance tax
- Estates do not pay Missouri estate tax
- Property can pass to beneficiaries without state‑level death taxes
For most families, this makes things very simple and reduces the tax impact they face when someone passes away.
Federal Estate Taxes
Even though the state doesn’t impose an inheritance tax, the federal government does for certain situations. A federal estate tax only applies to very large estates that must go over the federal exemption amount.
In 2026, the exemption amount has increased to $15 million per person and $30 million per married couple filing jointly in 2026. This amount is indexed for inflation starting in 2027. This means only people with exceptionally high estate values will even have to think about federal estate taxes
Things to remember include:
- The federal estate tax applies to the estate, not the individual heirs
- Only the portion of the estate that exceeds the federal exemption is taxed
- Most Missouri families will never come close to triggering federal estate tax liability
Where Taxes Could Still Affect You
Even though Missouri doesn’t impose an inheritance tax, certain taxes may apply on the specific items you inherit.
1. Income Tax on Certain Inherited Assets
Inherited property generally does not have a separate tax. However, some assets can be taxable if they are distributed or cashed out. This might include:
- Traditional IRAs
- 401(k)s
- Annuities
- Certain investment accounts
2. Capital Gains Tax on Sold Assets
Inherited property receives a step‑up in basis, meaning the asset’s value resets to its fair market value at the time of death. This significantly reduces capital gains tax if the beneficiary later sells the asset.
However, if the property appreciates after inheritance, capital gains tax may apply when it is sold.
3. Property Taxes
Real estate inherited in Missouri remains subject to local property taxes. These taxes are not related to inheritance but are ongoing obligations for the new owner.
Why Missouri Eliminated Its Inheritance Tax
Missouri’s inheritance tax was tied to a federal credit that allowed states to collect a portion of federal estate tax revenue. When the federal government phased out that credit, Missouri’s tax effectively disappeared.
The state chose not to reinstate its own independent inheritance or estate tax. As a result, Missouri is now considered a tax‑friendly state for retirees and families planning generational wealth transfers.
How This Impacts Estate Planning in Missouri
Even without a state inheritance tax, proper estate planning remains essential. Families often use tools such as:
- Revocable living trusts
- Transfer‑on‑death (TOD) deeds
- Beneficiary designations
- Payable‑on‑death (POD) accounts
- Wills
- Powers of attorney
For high‑net‑worth individuals, planning may also include:
- Irrevocable trusts
- Gifting strategies
- Charitable planning
- Business succession planning
While Missouri’s tax laws are favorable, federal rules and personal financial goals still require thoughtful preparation.
Learn More About Inheritance Taxes and Plan Your Estate
As we move into 2026, federal law feels a little more permanent, and there are still no state inheritance taxes. You can plan your estate with confidence when you speak to a Missouri estate planning lawyer. Fashion a plan that works for you and your beneficiaries today.
Let the dedicated estate planning attorneys at Mark Harford Law help you. Contact us today for a consultation.