You generally cannot deduct attorney fees for estate planning on your personal tax return, and a law signed on July 4, 2025 made that rule permanent. The Tax Cuts and Jobs Act had already suspended the deduction through 2025, and the One Big Beautiful Bill Act removed the expiration date entirely. A few narrow paths still allow a deduction — but only for business owners claiming succession-planning costs on a business return, or for trusts and estates paying their own administration expenses on Form 1041.
Why the Personal Deduction Is Gone for Good
Before 2018, fees for drafting a will, setting up a trust, preparing a power of attorney, or creating a healthcare directive could be claimed on Schedule A as a miscellaneous itemized deduction, subject to a 2% adjusted gross income floor. The Tax Cuts and Jobs Act of 2017 suspended that entire category of deductions for tax years 2018 through 2025.
The One Big Beautiful Bill Act, signed on July 4, 2025, amended the Internal Revenue Code so that no miscellaneous itemized deduction is allowed for any tax year beginning after December 31, 2017, with no expiration date attached.1Office of the Law Revision Counsel. 26 USC 67 – 2-Percent Floor on Miscellaneous Itemized Deductions The 2% AGI deduction path does not return in 2026 or any later year unless Congress passes a new law reopening it.
Tax-Planning Portions of the Bill Are Also Disallowed
Federal law recognizes a separate category of deductible expenses for determining, collecting, or obtaining a refund of any tax.2Office of the Law Revision Counsel. 26 USC 212 – Expenses for Production of Income In the past, if part of your attorney’s work involved analyzing gift tax strategies or structuring a trust to reduce estate tax, that slice of the fee could be pulled out and deducted.
That workaround no longer helps individuals. Tax advice fees fall within the miscellaneous itemized deduction category that is now permanently disallowed on personal returns.1Office of the Law Revision Counsel. 26 USC 67 – 2-Percent Floor on Miscellaneous Itemized Deductions Even a carefully itemized invoice separating tax planning hours from general planning hours will not produce a deduction on your Form 1040.
Business Succession Planning Is Still Deductible
If you own a business, legal fees tied directly to its operation or transition remain deductible as ordinary and necessary business expenses. The IRS treats fees for mapping out leadership transitions, drafting buy-sell agreements, and planning ownership transfers as business costs claimed on the appropriate business return.3Internal Revenue Service. Instructions for Schedule C (Form 1040)
Sole proprietors deduct these costs on Schedule C, Line 17. Partnerships and S corporations claim them on their entity returns. Tax advice fees related to the business are deductible in the same place. The legal work must connect to running or transitioning the business, not to distributing your personal assets after death. If a single engagement covers both, the invoice needs to separate the two categories so the business portion can stand on its own.
Fees a Trust or Estate Pays on Its Own Return
The permanent shutdown applies to individuals. Trusts and estates file their own income tax return on Form 1041 and operate under different rules. Costs paid in connection with administering the trust or estate — and that would not have been incurred if the property were not held in that form — are treated as above-the-line deductions rather than as miscellaneous itemized deductions.1Office of the Law Revision Counsel. 26 USC 67 – 2-Percent Floor on Miscellaneous Itemized Deductions Because they sit outside the suspended category, the permanent disallowance does not touch them.4Internal Revenue Service. Notice 2018-61
The Knight Standard
The Supreme Court set the test in Knight v. Commissioner: an expense qualifies only if it would be uncommon for a hypothetical individual to incur it outside the trust or estate context.5Justia U.S. Supreme Court Center. Knight v. Commissioner Routine costs like basic investment advice or personal tax preparation do not qualify, even when the trust writes the check.
What the Form 1041 Instructions Allow
The IRS instructions for Form 1041 identify specific deductible categories:6Internal Revenue Service. Instructions for Form 1041
- Fiduciary fees on Line 12, including probate court fees, fiduciary bond premiums, legal publication costs for notices to creditors, and certified copies of the death certificate.
- Attorney and accountant fees on Line 14 for preparing fiduciary income tax returns, the decedent’s final individual return, and estate or generation-skipping transfer tax returns. Fees for gift tax returns or other personal returns are not deductible, since those are costs an individual would ordinarily face.
- Other administration costs on Line 15a connected to administration that would not have arisen outside the trust or estate context.
Bundled Invoices Have to Be Split
When a single fee covers both deductible administration work and non-deductible work an individual would commonly need, the fee must be allocated between the two.6Internal Revenue Service. Instructions for Form 1041 Only the trust-specific or estate-specific portion is deductible on Form 1041. The attorney’s invoice needs enough detail to support the split.
Form 706 or Form 1041 — Not Both
Administration expenses of an estate can potentially be claimed on the estate tax return (Form 706) or on the estate’s income tax return (Form 1041). Federal law forbids claiming the same expense in both places. To deduct an administration expense on Form 1041, the estate must file a statement waiving the right to ever claim that expense on Form 706.7eCFR. 26 CFR 1.642(g)-1 – Disallowance of Double Deductions
The choice matters when the estate is large enough to owe federal estate tax. The federal exemption is $15,000,000 for deaths in 2026.8Internal Revenue Service. What’s New – Estate and Gift Tax A deduction on Form 706 reduces the taxable estate; a deduction on Form 1041 reduces income tax. Executors typically run the numbers both ways before filing the waiver, because once filed it is irrevocable for that expense.
What the Invoice Has to Show
Every surviving deduction depends on the attorney’s billing detail. A line item that just reads “estate planning services” will not hold up if the IRS asks questions. The invoice needs to identify each task: hours on business succession planning (deductible on Schedule C or the entity return), hours on fiduciary return preparation (deductible on Form 1041), and hours on personal wills, trusts, or powers of attorney (not deductible anywhere).
Ask for this level of detail when the engagement starts. Contemporaneous time entries carry far more weight than estimates put together later. If the attorney handles both deductible and non-deductible work, each invoice should list the tasks separately with matching time entries so the allocation is clear on the face of the bill.
The Cost of Claiming a Deduction You Cannot Support
Deducting estate planning fees that do not qualify can trigger an accuracy-related penalty of 20% of the resulting tax underpayment, or 40% if the underpayment involves a gross valuation misstatement.9Office of the Law Revision Counsel. 26 USC 6662 – Imposition of Accuracy-Related Penalty on Underpayments The penalty comes on top of the extra tax and interest. Because personal estate planning fees are now permanently non-deductible for individuals, putting them on a Form 1040 is a position with no legal support behind it.