The Estate Exemption Is $15 Million and Permanent. What Changes for Family Planning?

For 2026 the federal estate, gift, and generation-skipping transfer exemption is $15,000,000 per person — $30,000,000 for a married couple with proper portability or planning. The annual gift exclusion is $19,000 per recipient, or $38,000 from a married couple.

The more consequential change is structural. The One Big Beautiful Bill Act contains no sunset provision for this exemption. It is indexed for inflation going forward and does not revert on a scheduled date.

A fair caveat: "permanent" in tax legislation means "no expiration written into the statute," not "immune to a future Congress." Any provision can be amended. But the difference between planning against a known 2026 cliff and planning against unknown future legislation is enormous, and it changes what a sensible family should do this year.

From roughly 2023 through 2025, a great deal of estate planning was driven by a single fact: the exemption was scheduled to fall by roughly half at the end of 2025, and the IRS had confirmed there would be no clawback on gifts made under the higher amount. The rational response was "use it or lose it" — make large completed gifts before the deadline even if the assets were not otherwise ready to move.

That pressure is gone. Families who felt rushed into irrevocable structures were responding to a real deadline, but the deadline no longer exists.

The practical consequence is that a gift can now be timed for the reason a gift should be timed: the asset is ready, the recipient is ready, and the valuation is favorable. Compressing a decade of wealth transfer into one December is no longer the default.

With the exemption at $15 million per person, the number of families exposed to federal estate tax is small. For most of them, the binding constraint has flipped from transfer tax to income tax basis.

Assets that pass through an estate at death receive a step-up in basis to fair market value. Assets given away during life carry the donor's original basis to the recipient. For a highly appreciated asset held by someone whose estate will not owe federal estate tax anyway, lifetime gifting can convert a future zero-tax step-up into a real capital gains bill for the next generation.

This reverses a habit built over years of aggressive lifetime gifting. The question is no longer only "how do I move this out of my estate?" but "does moving it out cost my heirs more in capital gains than it saves in estate tax?" For families comfortably under the exemption, the answer is frequently yes.

That does not make lifetime gifting wrong. It makes it a calculation rather than a reflex — and it puts a premium on identifying which specific assets should move and which should be held until death.

Removing the transfer-tax urgency does not remove the non-tax reasons families use trusts, and those reasons have not changed:

- Creditor and divorce protection for a beneficiary - Control over timing and conditions of distributions to young or vulnerable heirs - Keeping a business or property intact across a generation rather than fragmenting it among heirs - Privacy — a trust does not go through probate - Removing future appreciation from the estate of a family whose wealth is growing faster than the indexed exemption

That last point matters for families near or above the threshold. A closely held business growing at 15% a year outruns inflation indexing, and freezing its value today through a sale to an intentionally defective grantor trust or a similar structure still works exactly as it did before.

Families who made large 2024 or 2025 gifts under deadline pressure. Those transfers are generally irrevocable and cannot be unwound, but the surrounding plan can be adjusted — trust investment strategy, distribution provisions where the instrument allows, the ordering of which remaining assets are held for step-up, and whether further gifting is still warranted. Some families gave away low-basis assets they should have held.

Families whose documents contain formula clauses tied to the exemption amount. Many wills and trusts allocate assets by reference to "the maximum amount that can pass free of federal estate tax." Those formulas were written when the exemption was a fraction of $15 million. At the current figure, a formula clause can silently direct nearly the entire estate to a credit shelter trust and leave a surviving spouse with far less outright than the document intended. This is worth a document review with your estate attorney, and it is the most common problem we see in plans drafted before 2018.

On state exposure: Texas imposes no estate or inheritance tax, so Texas residents face only the federal regime. Families with property in states that do impose one — or heirs living in those states — should confirm the state thresholds separately, since several sit far below the federal number.