For most families, the federal estate tax has always been someone else’s problem, and a change taking effect this year makes that even truer. The amount a person can pass on free of federal estate and gift tax rose to $15 million for 2026, or $30 million for a married couple. Just as important as the higher number is a quieter change beside it: the exemption was made permanent, which ends the long-running “use it or lose it” scramble that estate planners had been warning about.
The new numbers
The increase is meaningful in size. For 2026, the federal estate, gift, and generation-skipping transfer tax exemption is $15 million per person and $30 million per married couple, up from $13.99 million per person in 2025. As the law firm Morgan Lewis explains in its summary of the 2026 exemption amounts, the figure is now indexed to rise with inflation going forward, so it will keep climbing in future years rather than resetting downward.
The exemption is the amount you can transfer — during life or at death — before the federal estate and gift tax applies. Below it, no federal estate tax is owed. Above it, the tax kicks in only on the portion that exceeds the exemption. At $15 million per person, the overwhelming majority of estates fall entirely under the line, which is why the federal estate tax touches a very small share of families.
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Why “permanent” ends a real scramble
The bigger story for planning is not the size of the exemption but its stability. Under prior law, the elevated exemption was scheduled to be cut roughly in half at the end of 2025, dropping back toward pre-2018 levels. That looming cliff drove years of urgency: advisers pressed wealthier clients to make large gifts before the deadline to “lock in” the higher exemption while it lasted, because gifts made under a high exemption would not be clawed back if the exemption later fell.
The One Big Beautiful Bill removed the cliff. By making the higher exemption permanent and setting it at $15 million for 2026 with inflation indexing, the law eliminates the pressure to rush a major gift purely to beat a sunset date. Families who were told they had to act before the end of 2025 no longer face that artificial deadline, and decisions about when and whether to give can be made on their own merits rather than against a countdown.
The annual gift exclusion is a separate tool
It is easy to blur the lifetime exemption with the yearly gift limit, but they are different levers. The annual gift tax exclusion — the amount you can give any one person in a year without touching your lifetime exemption or filing a gift tax return — stays at $19,000 per recipient. A couple can combine theirs to give $38,000 to a single person in a year. Gifts within that annual limit do not count against the $15 million at all.
That distinction matters for ordinary families more than the headline number does. Most people will never approach the $15 million lifetime exemption, but many use the annual exclusion to help children with a home down payment, fund a grandchild’s education, or move money within a family without tax paperwork. The annual figure is the one most households will actually touch; the lifetime exemption is the ceiling almost none will reach.
A related feature quietly protects surviving spouses: portability. If one spouse dies without using their full exemption, the survivor can generally claim the unused portion, effectively combining both exemptions — the source of the $30 million couple figure. But portability is not automatic. It requires filing a federal estate tax return for the deceased spouse to make the election, even when no tax is owed. Families with substantial assets sometimes skip that filing because there is no tax bill, and in doing so forfeit the survivor’s ability to inherit the unused exemption. It is one of the few estate-tax steps that can matter even below the threshold.
What it means for your own planning
For the vast majority of families, the practical takeaway is reassurance. With the exemption at $15 million per person and permanent, federal estate tax is simply not a factor in most estate plans, and the pressure to make hurried lifetime gifts to dodge a sunset is off the table. The reasons to keep an estate plan current — a will, updated beneficiaries, powers of attorney, guardianship for minor children — have nothing to do with the estate tax and everything to do with making sure your wishes are carried out.
Where the number still matters is at the top. Families whose net worth approaches or exceeds the exemption, or who live in a state with its own estate or inheritance tax at a lower threshold, still have real planning to do, because state rules were not changed by this federal figure. But the specific worry that defined the last few years — that the exemption would be cut in half at the end of 2025 — has been settled, and the answer is that it went up and stayed there.
This article was produced with AI assistance and reviewed by a human editor. Figures are linked to their primary sources; where a claim could not be verified from the public record, we say so.
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