Answer (2026): The federal estate and gift tax exemption is now $15 million per person ($30 million for married couples), made permanent by the One Big Beautiful Bill Act signed July 4, 2025. The TCJA sunset to ~$7 million did not happen. But the higher exemption creates new planning questions, especially for households that pre-planned for a sunset, live in states with their own estate tax, or hold trust structures designed for lower thresholds.
Context: This is for households with existing estate plans, completed or in-progress trust structures, or coordinated gifting strategies that assumed a different exemption environment.
Action: Review these eight questions with your estate attorney and CPA, then explore Estate Planning features to organize documents and next steps.
Psychographic target: Primary = complexity-overloaded operator. Secondary = trust-first verifier. Primary objection to close = "No perceived difference."
Last reviewed: March 3, 2026.
- If you are a household that updated estate planning documents between 2023 and 2025 in anticipation of the TCJA sunset
- If you live in one of the 12 states (plus DC) with a state-level estate tax below the federal threshold
- If you have irrevocable trusts, credit shelter trusts, or generation-skipping structures that referenced a lower exemption amount
This guide is likely relevant if at least two statements are true:
- Your estate plan references the TCJA sunset or a ~$7 million exemption scenario.
- You live in a state with its own estate tax (Oregon, Massachusetts, New York, Illinois, Minnesota, or others listed below).
- You made large lifetime gifts in 2024 or 2025 specifically to "use it before you lose it."
Common assumption: "The exemption went up. My estate is well under $15 million. I have nothing to worry about."
Higher-confidence framing: The federal threshold is only part of the picture. State estate taxes start as low as $1 million (Oregon). Trust structures designed for a $7 million sunset may create unintended income tax consequences at $15 million. And gifts made under time pressure may not align with the permanent exemption. The change is not just "good news." It is a trigger to re-examine assumptions.
Each question is prioritized by:
- Frequency of outdated assumptions: how often estate plans still reference the sunset scenario
- Dollar impact of inaction: the potential tax or structural cost of not revisiting
- Coordination complexity: how many professionals (attorney, CPA, advisor) need to weigh in
The One Big Beautiful Bill Act was signed on July 4, 2025. It permanently set the federal estate and gift tax exemption at $15 million per person ($30 million for married couples), with inflation indexing starting in 2027. It also eliminated the TCJA sunset provision that would have cut the exemption roughly in half.
If your estate plan was drafted or updated between 2023 and mid-2025, it likely assumed a sunset. Documents may reference "anticipated exemption reductions," include sunset-triggered gift provisions, or structure trusts around a ~$7 million threshold. Those assumptions are now wrong.
Priority consideration: Ask your estate attorney whether any documents contain sunset-contingent language that needs revision.
Twelve states and the District of Columbia impose estate taxes with thresholds far below the $15 million federal exemption. For households in these states, the state estate tax is now the more likely exposure, not the federal tax.
State estate tax thresholds (2025-2026):
| State | Exemption | Notes |
|---|
| Oregon | $1 million | Lowest in the country |
| Rhode Island | ~$1.8 million | Indexed for inflation |
| Massachusetts | $2 million | Not indexed |
| Washington | ~$2.2 million | Graduated rates up to 20% |
| Minnesota | $3 million | Not indexed |
| Illinois | $4 million | Flat threshold |
| DC | ~$4 million | Indexed |
| Maryland | $5 million | Also has inheritance tax |
| Vermont | $5 million | Flat threshold |
| Hawaii | ~$5.5 million | Set by 2019 legislation |
| Maine | ~$7 million | Indexed |
| New York | $7.35 million (2026) | Cliff: estates over 105% of exemption lose the entire exclusion |
| Connecticut | Matches federal ($15M) | Only state that conforms |
Additionally, six states impose inheritance taxes (taxing recipients, not the estate): Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania.
Priority consideration: If your estate exceeds your state's threshold (even if it is well below $15 million), state estate tax planning may be your primary exposure. Coordinate with a CPA who understands your state's rules.
Between 2023 and 2025, many families accelerated irrevocable gifts, funding SLATs (spousal lifetime access trusts), GRATs, or direct transfers, to "lock in" the higher exemption before an expected sunset.
Those gifts are permanent. You cannot undo an irrevocable transfer. But the planning rationale behind them shifted. Questions worth asking your attorney:
- Were the gifts the right call given the permanent $15 million exemption, or would a different structure have worked better?
- Did the transfers create income tax consequences (loss of step-up in basis) that no longer have an offsetting estate tax benefit?
- Is the remaining lifetime exemption sufficient for future planning without further gifts?
The IRS confirmed in Treasury Regulation 20.2010-1(c) that gifts made under the higher exemption will not be clawed back if the exemption later decreases. That anti-clawback rule still applies, but the exemption did not decrease. It went up.
Credit shelter trusts (also called bypass trusts or family trusts) were designed to maximize the estate tax exemption by sheltering assets from the surviving spouse's estate. When the exemption was $5 million or less, this structure made clear sense.
At $15 million per person ($30 million with portability), credit shelter trusts may create problems they were designed to prevent:
- Assets in the bypass trust do not receive a second step-up in basis at the surviving spouse's death. This can mean higher capital gains taxes on appreciated assets.
- The trust may force the surviving spouse to manage assets through a trust structure that adds complexity without tax benefit.
- Income earned inside the trust may be taxed at compressed trust tax brackets (37% kicks in at $15,200 for trusts vs. $609,350 for individuals in 2025).
Priority consideration: Ask your estate attorney whether existing bypass or credit shelter trust provisions should be revised, converted to a disclaimer trust, or restructured to take advantage of portability instead.
The $30 million combined exemption for married couples depends on portability, the ability to transfer a deceased spouse's unused exemption (DSUE) to the surviving spouse. Portability is not automatic. It requires filing IRS Form 706 (estate tax return) for the deceased spouse, even if no estate tax is owed.
If a spouse died and Form 706 was not filed, the surviving spouse's exemption is $15 million, not $30 million. This is one of the most common and highest-dollar planning gaps in estate planning.
In 2022, the IRS issued Revenue Procedure 2022-32 extending the portability election deadline to five years after the decedent's death (up from the previous two-year window). If you missed the original filing deadline, check whether the extended window still applies.
Priority consideration: If a spouse has died and you are uncertain whether Form 706 was filed, confirm with your estate attorney or CPA immediately. The cost of filing Form 706 is small relative to the potential loss of $15 million in exemption.
The generation-skipping transfer (GST) tax exemption also increased to $15 million per person under the OBBBA. This exemption applies to transfers that skip a generation, for example, gifts or bequests directly to grandchildren.
At $15 million, households have more room for multi-generational strategies:
- Dynasty trusts can hold more assets free from estate tax across multiple generations.
- GST-exempt trusts established before the increase may have room for additional allocations.
- Existing GST allocations should be reviewed to confirm they were made correctly and are still optimally structured.
Unlike the basic estate exemption, GST exemption is not portable between spouses. Each spouse must use their own $15 million GST exemption independently.
Priority consideration: Coordinate with your estate attorney on whether existing GST allocations are current and whether additional multi-generational planning makes sense under the higher threshold.
The annual gift tax exclusion for 2026 remains at $19,000 per donee ($38,000 per donee for married couples who elect gift splitting). This amount is unchanged from 2025.
Annual exclusion gifts do not reduce your lifetime exemption. They are a separate planning layer. But the permanent nature of the $15 million exemption changes the calculus:
- Before the OBBBA, accelerated large gifts made sense because the exemption was temporary. The "use it or lose it" pressure pushed families toward large irrevocable transfers.
- After the OBBBA, there is no urgency to make large lifetime gifts solely to preserve exemption capacity. Annual exclusion gifts and gradual wealth transfer may be sufficient for many households.
This does not mean large gifts are always wrong, but the decision framework has shifted from "act now before the window closes" to "evaluate whether this transfer serves your goals independent of exemption pressure."
The One Big Beautiful Bill Act has no sunset provision, which makes the $15 million exemption "permanent" in the statutory sense. But tax law is only as permanent as the next Congress.
The estate tax exemption has changed multiple times in the past two decades:
- 2001: $675,000
- 2009: $3.5 million
- 2010: Estate tax repealed for one year
- 2011: $5 million (restored)
- 2018: $11.18 million (TCJA doubling)
- 2025: $13.99 million (inflation-adjusted)
- 2026: $15 million (OBBBA permanent increase)
A future administration could lower the exemption. Morgan Lewis noted that it may still be "prudent to consider making large gifts during the current administration" in case of future amendments or repeals.
Priority consideration: Build estate plans that work at the current $15 million threshold but remain flexible if the exemption changes. Discuss scenario planning with your estate attorney. What happens to your plan at $15 million, at $10 million, and at $7 million?
- Have all estate documents been reviewed for sunset-contingent language?
- Is state estate tax exposure mapped and addressed?
- Are bypass/credit shelter trust provisions still appropriate at $15M?
- Has Form 706 been filed for any deceased spouse?
- Are GST allocations current and correctly applied?
- Is the gifting strategy aligned with permanent (not temporary) exemption logic?
- Does the plan include scenario flexibility for future exemption changes?
- Do any of our current documents reference the TCJA sunset or a ~$7M exemption?
- Should we convert our credit shelter trust to a disclaimer trust or rely on portability?
- Is our GST allocation optimally structured at the $15M level?
- What state estate tax exposure do we have, and how should we address it?
- If the exemption drops in the future, does our current plan still function?
- Schedule an estate plan review with your attorney, specifically to identify sunset-contingent language and trust structure implications.
- Confirm Form 706 status for any deceased spouse, and check whether portability was properly elected.
- Map your state estate tax exposure. Compare your estate value to your state's threshold (if applicable) and discuss mitigation options with your CPA.
First-party proof snapshot
Pattern Snapshot: outdated exemption assumptions and missing portability elections as recurring gaps
Outdated exemption assumptions and missing portability elections appeared as recurring planning gaps in estate plan reviews, even in households with attorney-drafted documents.
How this was measured
Methodology: Anonymized estate plan review workflow records were reviewed for recurring planning gaps in document assumptions and structural alignment.
Sample: Anonymized estate plan review records from recent quarters (threshold >30 observations)
As of: March 2026
Caveat: Directional internal workflow signal, not legal advice and not an outcome guarantee.
Review these questions with your estate attorney and CPA, then explore Estate Planning features to organize your documents and coordinate next steps through Turn this into a one-page action plan.
This guide is for planning and coordination only. It does not provide tax, legal, or investment advice. Estate planning decisions should be confirmed with qualified professionals including an estate planning attorney, CPA, and financial advisor. Federal and state tax laws are subject to change.
