Published: March 3, 2026
Author: Joshua Key, Esq. | Alabama State Bar | (256) 715-5711
TL;DR: The viral TikTok claim is false. No federal law prevents you from inheriting your parents’ house. The 2026 estate tax exemption is $15.9 million per person ($31.8 million for married couples with proper planning). Only a tiny fraction of Americans pay any estate tax.
Disclaimer: This blog post is for informational purposes only and does not constitute legal advice or create an attorney-client relationship. Consult a qualified Alabama estate planning attorney for advice specific to your situation.
You’ve seen it on social media: “NEW 2026 LAW: You can no longer inherit property from deceased family members.” The posts claim a congressman named Jenkins introduced HR-666 in December 2025. They say you have 60 days to sell your parents’ house or lose it to the government. They use scary legal-sounding terms like “IRS Form 1099-HE” (which does not exist).
This is complete fabrication. There is no HR-666. There is no Congressman Jenkins. And the federal estate tax exemption rose to $15.9 million per person for 2026 thanks to TCJA inflation adjustments.
The Alabama Reality: Two Levels of Estate Tax
Most people are surprised to learn Alabama has no state estate tax. Zero. Alabama eliminated its estate tax decades ago. What you’re potentially subject to is federal estate tax only, and only if your gross estate exceeds $15.9 million (or $31.8 million for married couples with proper planning, which requires a timely portability election via Form 706).
But this exemption is temporary. Unless Congress acts, the Tax Cuts and Jobs Act provisions sunset after 2025, and the exemption could drop to roughly $7 million per person. For families with closely-held businesses, real estate portfolios, or significant retirement accounts, the change is significant. The time to plan is now.
One scenario where the government can make a claim against a house is Medicaid estate recovery. If a parent received Medicaid long-term care benefits, Alabama can seek reimbursement from the estate after death. This is not an estate tax. It is a separate program, and it catches families off guard far more often than estate tax does. Proper planning with a qualified elder law attorney can address this risk.
What Is the Truth About Myth #1: “The Government Takes 40% of Every Estate”?
False. The estate tax rate ranges from 18% to 40%, and it only applies to amounts above the exemption threshold. For a $20 million estate owned by a single person in 2026, only about $4.1 million would be subject to tax at roughly 40%, not the entire estate. And with proper planning, even this exposure can be reduced or eliminated through valuation discounts, charitable giving, and family limited partnerships.
Well under 1% of deaths nationwide trigger any federal estate tax. The vast majority of Alabama families will never owe a dollar in estate tax.
What Is the Truth About Myth #2: “You Can’t Avoid Estate Tax. It’s Inevitable”?
False. Every wealthy family with dynastic wealth uses legal structures to minimize or eliminate estate tax. Grantor retained annuity trusts. Qualified personal residence trusts. Intentionally defective grantor trusts. Charitable lead annuity trusts. These aren’t loopholes. They’re codified in the Internal Revenue Code and have been approved by courts for decades.
What Is the Truth About Myth #3: “Trusts Don’t Work Anymore. The Government Closed Them”?
False. Trusts have been around since the Crusades. Alabama recognizes virtually every trust structure available under common law and the Uniform Trust Code. Properly structured irrevocable trusts still remove assets from your taxable estate while allowing you to maintain control through careful trustee selection and trust protector provisions.
The Window: 2025-2026 Planning Opportunity
We are in a unique planning environment. Until the end of 2025, you can gift up to $13.99 million per person without gift tax. Starting in 2026, unless Congress extends TCJA, that number gets cut approximately in half. For families with estates between $7 million and $30 million, this is the most favorable planning environment in 20 years.
What should you do? If your family net worth, including your house, retirement accounts, life insurance, business interests, and investments, exceeds $7 million, you should schedule a consultation before the deadline. The structures we can implement now may not be available later.
Alabama-Specific Considerations
Alabama does not have a state income tax on Social Security benefits, and it has relatively low property taxes compared to national averages. But federal estate tax can still devastate multi-generational wealth if you fail to plan. Family farms in Limestone County, manufacturing businesses in Decatur, and medical practices throughout the Tennessee Valley are all potentially exposed.
The key is starting early. Estate tax planning works best when implemented years before death, when assets can be transferred at discounted valuations and when the lookback periods of various statutes have time to run.
How to Actually Protect Your Estate
For most Alabama families, a basic will-based estate plan is sufficient. But for families with net worth above the exemption threshold, advanced planning is essential. This typically involves gifting strategies utilizing the annual exclusion ($18,000 per recipient in 2025), spousal lifetime access trusts (SLATs) to lock in current exemption, family limited partnerships to achieve valuation discounts, charitable remainder trusts for tax-efficient philanthropy, and intentionally defective grantor trusts to freeze estate values.
These strategies require sophisticated legal drafting and must account for Alabama’s specific property law and the federal unified credit system. Alabama is not a community property state, which affects how married couples structure their plans.
Bottom Line
Ignore the viral TikTok videos. There is no law banning inheritance. There is no HR-666. What exists is a temporary estate tax exemption that could be cut in half after 2025 unless Congress acts. If your family has substantial assets, now is the time to implement protective structures while the exemption is historically high.
For families with modest estates under $7 million, the estate tax is irrelevant. You do not need complex planning. For everyone else, consider whether the cost of inaction exceeds the cost of proper planning.
Schedule a consultation to review your specific situation and determine whether advanced estate tax planning makes sense for your family. Or call (256) 715-5711.
Related: AI Deepfakes and Alabama Estate Planning: What Families Need to Know
Schedule a free 30-minute consultation to review your estate plan. Call (256) 715-5711.
Frequently Asked Questions
Does Alabama have a state estate tax?
No. Alabama eliminated its state estate tax in 2005. Alabama residents only face the federal estate tax, which applies to estates exceeding $13.61 million per person (2024). Most Alabama families owe no estate tax.
What is the federal estate tax exemption in 2024?
The federal estate tax exemption is $13.61 million per individual and $27.22 million for married couples in 2024. This exemption is scheduled to decrease to approximately $7 million per person in 2026 when the Tax Cuts and Jobs Act provisions expire.
Do I need an estate plan if my estate is below the tax exemption?
Yes. Estate planning is about far more than taxes. It addresses probate avoidance, asset protection, guardianship for minor children, healthcare decisions, and control over how your assets are distributed. Every adult needs a basic estate plan regardless of estate size.
Will the estate tax exemption change in 2026?
The current elevated exemption expires December 31, 2025 unless Congress acts. The exemption is expected to drop to approximately $7 million per person. Families with estates between $7 million and $13.61 million should plan now while the higher exemption is available.
Is a trust necessary if I do not owe estate taxes?
A trust serves purposes beyond tax savings. A revocable living trust avoids probate, maintains privacy, provides for incapacity management, and gives you control over distributions to beneficiaries. Most Alabama families benefit from a trust regardless of tax obligations.
What estate planning mistakes do Alabama families make most often?
The most common mistakes are: failing to fund a trust after creating it, not updating beneficiary designations after divorce or death, relying on a will alone when a trust would avoid probate, and not planning for incapacity with powers of attorney and healthcare directives.