The amount a person can pass to heirs free of federal estate and gift tax has jumped to $15 million, and — unlike the last big increase — it is now written into law without an expiration date. For a married couple, careful planning can shield up to $30 million. The change took effect January 1, 2026, and it removes a cliff that would otherwise have cut the exemption roughly in half at the start of this year.
What the $15 million exemption means and where it came from
The figure is what the IRS calls the “basic exclusion amount,” and it sets the line below which an estate owes no federal estate tax. According to the IRS’s estate and gift tax guidance, the law known as the Working Families Tax Cuts — signed on July 4, 2025, as Public Law 119-21 — amended the tax code to raise the basic exclusion amount to $15,000,000 for 2026. That is up from $13,990,000 for people who died in 2025, and the same exemption applies to lifetime gifts, so a couple can jointly protect up to $30 million.
Just as important as the number is the word “permanent.” The 2017 tax law that first pushed the exemption into the double-digit millions was temporary, and its higher amounts were scheduled to sunset at the end of 2025, dropping back toward pre-2018 levels of roughly $5 million to $7 million per person. The 2025 law scrapped that sunset. The new $15 million level carries no expiration date and, per the IRS’s 2026 inflation adjustments, will continue to rise with inflation in future years.
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Why this matters mostly to a small slice of households
It helps to keep the scale honest. A $15 million-per-person exemption means the federal estate tax touches only a very small number of the wealthiest estates; the overwhelming majority of families are nowhere near the threshold and owe no federal estate tax at all. For most readers, the practical effect of this change is simply reassurance — the cliff that some had been planning around did not arrive, and there is no looming rollback to a lower number to worry about.
For families whose net worth does approach these figures — often because of a business, a farm, appreciated real estate, or a lifetime of investing — the stakes are real. The top federal estate tax rate remains 40% on amounts above the exemption, so the difference between a $15 million shield and the roughly $7 million that would have applied under a sunset could translate into millions of dollars of tax on a large estate. The permanence also removes a source of pressure: heirs and advisers no longer face a year-end deadline to lock in the higher exemption before it disappeared.
The annual gift exclusion is a separate, smaller number
People often confuse the lifetime exemption with the yearly gift limit, and they are not the same. Separate from the $15 million lifetime figure, the IRS sets an annual gift exclusion — the amount you can give any one person in a year without it counting against your lifetime exemption or requiring a gift tax return. That annual exclusion is $19,000 per recipient for 2026, unchanged from 2025. A couple can effectively give $38,000 to each recipient by combining their exclusions. Gifts above the annual limit are not automatically taxed; they simply reduce the giver’s lifetime exemption and generally require filing a gift tax return.
This distinction matters for ordinary money decisions. Helping a grandchild with a down payment or a tuition bill, for example, can often be structured to stay within the annual exclusion or to use other carve-outs, without touching the multimillion-dollar lifetime number at all. The lifetime exemption is the backstop for larger transfers and for what passes at death.
What to do with the certainty
The clearest takeaway is that the planning environment is now stable. Because the exemption is permanent and indexed, families no longer have to rush estate moves to beat a sunset. That said, permanence in tax law means “until Congress changes it,” not “forever” in a literal sense — a future Congress could always revisit the number. For now, though, the law on the books sets a $15 million per-person, $30 million per-couple exemption with no expiration.
Anyone with an estate large enough to be in range should treat this as a good moment to review wills, trusts, and beneficiary designations with a qualified estate attorney, rather than acting on headline numbers alone. State-level estate or inheritance taxes, which some states impose at far lower thresholds than the federal exemption, are a separate matter the federal change does not address. The IRS keeps the current basic exclusion amounts, by year of death, on its estate and gift taxes page for anyone who wants to confirm the figures directly.
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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