What’s the New Exemption Amount?
Under the One, Big, Beautiful Bill (OBBB), the basic exclusion amount for federal estate and gift tax — that’s how much you can transfer before paying gift or estate tax — increased to $15,000,000 for calendar year 2026. That’s up from approximately $13,990,000 in 2025. (irs.gov)
Strategies to Use the Increase This Year
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Make larger lifetime gifts now: Because the exemption is expected to remain indexed, but future legislative change might reduce it or freeze it, it's an opportunity to shift assets while the exemption is high.
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Use annual gift exclusions in combination:** Annual exclusion per donee remains (currently $19,000). You can give up to this amount each year without counting against your lifetime exemption. Combine with lifetime gifts for larger asset transfers. (irs.gov)
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Revisit estate planning documents: Trusts, wills, and gifting trusts may have threshold limits embedded. With the new exemption, you might simplify or remove some trust structures that were designed to avoid tax in past years.
Example Scenarios
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Couple transferring property worth $12M to children: In 2026, full transfer is under exemption threshold—no federal gift tax due. Previously in 2025, such transfer “used up” much more of lifetime exemption.
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Estate planning for a single individual: If assets exceed $15M and you expect value to increase, you can use the exemption to pass on that amount estate-tax-free.
Caveats & What to Watch For
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Gift vs. Estate Tax: Any gifts above the annual exclusion count against your lifetime exemption. Keep proper records for gift tax filings (Form 709).
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State rules differ: Some states have separate estate or inheritance taxes with lower exemption thresholds; state-level planning still necessary.
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Potential sunset or change: Laws can change. If you're relying heavily on the $15M exemption, monitor legislative actions for sunset clauses, freezes, or tax rate changes.
Bottom Line
The 2026 increase to $15 million in estate & gift tax exemption is a major planning opportunity. Whether you're structuring your estate, making large gifts, or saving on state-level taxes, timing these moves while the exemption is high may yield significant benefits.