The $15 Million Estate and Gift Tax Exemption in 2026: What It Means for Your Plan

For 2026, every person can give away or leave up to $15 million without federal estate or gift tax, and a married couple can shelter $30 million. Unlike the old rules, this amount does not drop by half after 2025. The One Big Beautiful Bill Act made it permanent and indexed it for inflation. That removes the deadline pressure many families felt, but it does not remove the need for an estate plan.

The 2026 numbers

• Lifetime exemption: $15 million per person, $30 million per married couple
• Annual gift exclusion: $19,000 per recipient, or $38,000 if spouses split gifts
• Gifts to a non-citizen spouse: $194,000 a year
• Top estate and gift tax rate: 40%
• Generation-skipping transfer exemption: $15 million per person

Gifts up to the annual exclusion do not use any of your lifetime exemption and do not need a gift tax return. Gifts above it require Form 709, due with your income tax return, even though no tax is usually owed.

If you are not near $15 million

Most families will never owe federal estate tax. Estate planning still matters, for reasons that have nothing to do with the federal tax:

• State estate taxes. About a dozen states and the District of Columbia have their own estate tax, often with much lower exemptions. New York's exemption is about $7 million, and its "cliff" can tax the whole estate once you go more than 5% over it. Massachusetts and Oregon start at $2 million and $1 million.
• Basis step-up. Assets you own at death generally get a new basis equal to their value at that time. Assets you give away during life keep your old basis. For appreciated real estate or stock, holding until death can erase a large capital gains tax.
• Probate and control. A revocable trust, updated beneficiary designations, and a will keep assets out of probate and in the hands you choose.
• Business succession. An owner's death without a plan can freeze a company's bank accounts and leave no one with authority to run it.

If you are near or above the exemption

• Use annual exclusion gifts every year. A couple with three children and six grandchildren can move $342,000 a year out of their estate with no tax and no reporting.
• Pay tuition and medical bills directly. Payments made straight to a school or a medical provider are not gifts at all, on top of the annual exclusion.
• Fund trusts with growth assets. Moving assets that are likely to grow, such as business interests or real estate, into an irrevocable trust removes the future growth from your estate.
• Use valuation discounts carefully. Gifts of minority interests in a family LLC or partnership can be valued below their share of the underlying assets. The IRS reviews these closely, so a qualified appraisal is essential.
• Elect portability. When the first spouse dies, file an estate tax return to carry their unused exemption to the survivor. It is easy to miss when no tax is due, and it can be worth millions.

What to review now

• The date your will and trust documents were last updated, and whether they reference old exemption amounts in their formulas
• Beneficiary designations on retirement accounts and life insurance
• Whether your state has an estate tax and where your assets are located
• Who would run your business, and how they would be paid, if you could not

OICPA's estate and trust team prepares gift, estate, and trust tax returns, and our wealth and legacy planning team works with your attorney to coordinate the tax side of your plan.

Frequently asked questions

Will the $15 million exemption go down in the future?

Not under current law. It is permanent and increases with inflation each year. A future Congress could change it, as with any tax rule.

Do I need to file a gift tax return if I gave my child $50,000?

Yes. Any gift to one person above $19,000 in 2026 requires Form 709. No tax is due unless your lifetime gifts exceed the exemption.

Does my spouse need to file an estate tax return when I die if no tax is owed?

Filing is the only way to transfer your unused exemption to your spouse under portability. It is usually worth doing.

Is life insurance part of my taxable estate?

Yes, if you own the policy. An irrevocable life insurance trust can own the policy instead and keep the payout outside your estate.