In 2026, a significant change in federal tax law takes effect that will reshape estate and wealth transfer planning for many Americans — especially high-net-worth families. After years of uncertainty about the future of historically high estate and gift tax exemptions, Congress acted in 2025 to provide long-term clarity and enhanced planning flexibility.
What Changed — The Basics
A Higher Lifetime Exemption
Starting January 1, 2026, the federal lifetime estate and gift tax exemption — the amount you can transfer, either during life (as gifts) or at death (as part of your estate), without owing federal tax — increases to:
- $15 million per individual
- $30 million per married couple (with proper planning)
This represents an increase from the 2025 exemption amounts of $13.99 million per individual and $27.98 million for married couples.
Unified Gift & Estate Tax
The exemption is unified, meaning that lifetime gifts count against the same total as what you transfer at death. If you give away assets during life that use up part of your $15 million lifetime exemption, you’ll have less left to shelter assets at death.
Annual Gift Tax Exclusion
Separately, the annual gift tax exclusion remains at $19,000 per recipient in 2026, the same as in 2025. This exclusion allows you to give up to $19,000 to each individual each year without using up any amount of your lifetime exemption or having to report the gifts.
Married couples can combine their annual exclusions, effectively gifting up to $38,000 per recipient per year without touching their lifetime limit.
Why This Matters
Prevents a Major Tax Bite in 2026
Before this law changed, the increased exemption amounts under the 2017 Tax Cuts and Jobs Act (TCJA) were scheduled to sunset at the end of 2025, potentially dropping to approximately $7 million per person in 2026. The expansion to $15 million not only avoids a dramatic reduction — it doubles the older scheduled levels and provides long-term predictability for tax and estate planning.
More Assets Shielded from Federal Tax
Under the new figures, only estates and gifts above $15 million per person (or $30 million for married couples) will be subject to federal estate and gift tax, which is currently taxed at a 40% rate on amounts over the exemption.
Offers Planning Flexibility
This increase gives high-net-worth families more time and room to structure their wealth transfers strategically — whether through lifetime gifting, trusts, or other advanced planning techniques — without the pressure to act before year-end 2025.
Practical Planning Considerations
Revisit Your Estate Plan
Even with a higher exemption, it’s important to review your estate plan. Documents like wills and trusts may reference older exemption amounts and may need updating. Estates that once needed complex structures to minimize tax may now require simpler or different solutions.
Consider Lifetime Gifting
Because the exemption applies to lifetime gifts as well as estate transfers, you can intentionally make gifts now or in 2026 to remove appreciating assets from your taxable estate. This strategy can be beneficial if those assets are expected to grow significantly in value.
Watch State-Level Taxes
Federal changes do not affect state estate or inheritance taxes in states that levy them. Some states, like New York or Maryland, have their own thresholds and rules, and those should be part of comprehensive planning.
Stay Alert to Future Legislative Action
Although the exemption increase is now permanent under current law and indexed for inflation, future Congresses can always modify tax law. Getting professional guidance helps align planning to potential changes.
What This Means for Families
For many families, these changes:
- Reduce the number of estates that will owe federal tax.
- Provide breathing room for wealth transfer strategies.
- Allow more thoughtful use of gifting and trust planning.
Even individuals with estates under the new exemption amount should consider updating estate planning documents to reflect life changes, goals, and any state tax considerations.
In Closing
The 2026 federal estate and gift tax exemption increase marks one of the most favorable changes to wealth transfer law in recent years. With a $15 million per person exclusion, taxpayers have enhanced ability to transfer wealth tax-efficiently during life and at death — without the immediate urgency that existed just a year ago. Yet proactive planning remains key, especially for those nearing or exceeding the threshold or with complex planning needs.Contact us to review your current plan, explore lifetime gifting strategies, and ensure your wealth transfer goals are aligned with the new federal law.