A victory for high-net-worth families
For years, wealthy taxpayers have been watching the clock tick down to the end of 2025, knowing that the generous estate and gift tax exemptions would expire. Under the 2017 Tax Cuts and Jobs Act (TCJA), individuals were allowed to shield nearly $14 million from federal estate and gift taxes. But those higher levels were scheduled to sunset at the end of 2025, reverting to about $5 million per person (adjusted for inflation).
Now, thanks to the One Big Beautiful Bill Act, panic is unnecessary. Beginning in 2026, the exemption level will increase to a staggering $15 million per individual—and $30 million for couples. Better still? Unlike the TCJA provisions, this one does not have an expiration date.
What this means in plain English
If you’re wealthy enough to worry about estate taxes, here’s the bottom line: you can pass on or donate much more money without Uncle Sam taking a cut of it.
Assuming you’re married. Beginning in 2026, you and your wife or husband can pass on or donate up to $30 million tax-free. That’s up considerably from what would have been around $10–11 million total under the old, pre-2017 system.
The gift and estate tax exemptions accompany each other, which means that the gifts you make in excess of the annual exclusion limit ($19,000 in 2025) will eat into the sum you have to leave later. But the extra breathing space makes it easier to plan larger gifts now without concern about how much you’ll pay later.
No rush this time
And here’s some better news: unlike the TCJA, the new exemption does not expire. Wealthy families don’t need to scramble to put into action elaborate estate planning strategies before a sunset date comes marching up to greet them.
That said, tax laws can change anytime. A future Congress could amend or even repeal this provision, so some experts suggest taking advantage of the high levels sooner rather than later. If you’ve been thinking about gifting a family business, real estate, or other appreciating assets, now may be the right time to act.
Watch out for state estate Taxes.
While the government at the federal level is making it easier, not all states are playing nice. Twelve states, along with Washington, D.C., continue to have their own estate taxes. For most, their exemption levels are far lower than at the federal level.
For example, in Massachusetts and Oregon, a statewide estate tax is imposed on estates of $1 million or less. That is, even those far from meeting the federal $15 million exemption will be subject to a state-level tax. If you have property in—or reside in—one of them, though, careful planning is still necessary.
Why this matters beyond the ultra-wealthy
Fewer Americans will ever come close to the $15 million exemption. But the ripple effects cannot be dismissed. Greater exemptions have a way of influencing how wealthy families structure gifts, trusts, and inheritances. That in turn can affect philanthropy, family businesses, and even investment in local economies.
For wealthy families, it means peace of mind and more freedom to plan. For the rest of us, it’s another reminder of just how much tax policy can shift depending on who is in power—and why it pays to stay informed.
Read this later:
IRS releases draft copy of Schedule 1-A for 2025 deductions on tips, overtime pay, car loan interest
Iconic Candy revives beloved 90s flavors to bring memories flooding back
What are Required Minimum Distributions and how are they calculated?
The bottom line
If you’re one of the wealthy families affected, the IRS just awarded you a winner: $15 million per person, tax-free, in 2026. Couples get double. No sunset provisions mean less pressure to make haste, though skillful estate planning is still required—especially if state estate tax is involved.
The news? Celebrate the increased exemption, but don’t believe the rules will last indefinitely. In the world of taxes, there is one surety: change.
